ACH Returns & Reversals

To understand how ACH Returns and Reversals work, you must first read the Types of ACH Transactions. Next, you must understand the scenarios around ACH Returns and Reversals.

ACH Return
Filed by the RDFI, in the following scenarios:

1. Not Sufficient Funds (NSF): If the bank account at the RDFI does not have sufficient funds to cover the debited amount, an automatic ACH Return is filed by the RDFI, with the ODFI.

Example: In the case of 2b: ACH Debit Received by Copycraft (to pay TG&E), if Copycraft's Bank Account does not have does not have sufficient funds to cover the debited amount, an automatic ACH Return is filed by the RDFI, with the ODFI, in this case, TG&E's Bank, Citi.

2. Unauthorized Transaction: If the account holder at the RDFI requests a return to the payment due to an unauthorized ACH Debit transaction, an ACH Return is filed by the RDFI, with the ODFI. Solid must receive the request to file the return within 24 hours.

Example: In the case of 2b: ACH Debit Received by Copycraft (to pay TG&E), if Copycraft's account holder did not authorize TG&E to ACH Debit its account, then an ACH Return is filed by the RDFI, with the ODFI, in this case, TG&E's Bank, Citi.

3. Incorrect Account: If the bank account at the RDFI is either invalid, closed, or does not exist, an automatic ACH Return is filed by the RDFI with the ODFI.

Example: In the case of 2b: ACH Debit Received by Copycraft (to pay TG&E), if Copycraft's Bank Account is closed, an automatic ACH Return is filed by the RDFI, with the ODFI, in this case, TG&E's Bank, Citi.

ACH Reversal
Filed by the ODFI, in the following scenarios:

1. Incorrect Amount: If an incorrect dollar amount was credited to or debited from another bank account, then an attempt to reverse the transaction can be filed by the ODFI, with the RDFI. Solid must receive the request to file the return within 24 hours.

Example: In the case of 1a: ACH Credit Originated by Copycraft (to pay Wholesale Paper), if Wholesale Paper's Bank Account at Chase was credited with an incorrect dollar amount, then an attempt to reverse the transaction can be filed by the Copycraft's Bank (the ODFI). 

2. Duplicate Transaction: If a duplicate of the same dollar amount was credited to or debited from another bank account, then an attempt to reverse the transaction can be filed by the ODFI, with the RDFI. Solid must receive the request to file the reversal within 24 hours.

Example: In the case of 1a: ACH Credit Originated by Copycraft (to pay Wholesale Paper), if Wholesale Paper's Bank Account at Chase was credited twice with the same dollar amount, then an attempt to reverse the transaction can be filed by the Copycraft's Bank (the ODFI). 

3. Incorrect Account: If the ODFI sends a payment to an incorrect account, an ACH Reversal can be filed by the ODFI, with the RDFI.

Example: In the case of 1a: ACH Credit Originated by Copycraft (to pay Wholesale Paper), if Wholesale Paper's Bank Account at Chase was incorrect, then an attempt to reverse the transaction can be filed by the Copycraft's Bank (the ODFI). 

Note: ACH Reversals are not guaranteed to be honored by the RDFI, as the funds have already been debited or credited and may not exist in the RDFI Bank Account. The RDFI has 48 hours to respond to the ACH Reversal request.

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