ARC transactions for businesses

Posted By: Chiquita Banana

ARC transactions for businesses - 06/23/04 05:18 PM

I have a business customer who placed a stop payment on a series of checks that had been stolen. (This was after we advised to close the account and they refused).

One of the checks was converted to an ARC transaction.
1)I didn't think business checks could be converted because of Reg E
and
2)How should I return the ACH? I could do an R38-Stop Payment on Source Document or R29-Corporate Customer Advises Not Authorized.

Any suggestions?
Posted By: AnnL

Re: ARC transactions for businesses - 06/23/04 05:42 PM

Checks must be drawn on consumer accounts (per NACHA rules) to be converted to an ARC. You could Return the entry R10 due to an improper source document or R38 Stop Pyment on source document. Either would be correct but I would lean towards Stop Payment
Posted By: RandomName

Re: ARC transactions for businesses - 06/24/04 07:21 PM

I like the R38 approach better here, because the Receiver is not obligated to cough up the dreaded WSUPP, as would be the case with the R10.