Industry Alerts

Industry Alerts

Industry Alerts provides member financial institutions with critical information; such as changes to the NACHA Operating Rules, Requests for Comment, notices from Treasury, NEACH cancellations, and other important and often time-sensitive information. This is a members-only resource. Login for access.  


ALERT: IMPORTANT UPDATE: Members Receiving Suspect Entries

September 11, 2019


IMPORTANT UPDATE: Members Receiving Suspect Entries


TO: NEACH Member Financial Institutions


Please share this information with all departments that process ACH and Check Transactions within your financial institution. This alert is provided for information purposes as part of NEACH's member services.

Your membership in NEACH helps support NEACH advocacy initiatives at the national level.  


Last week, NEACH released a Uniform Payments Alert regarding members receiving suspect entries, which included steps impacted financial institutions could consider taking. Due to the wide-reaching nature of this situation, media outlets have picked up the developing story and released articles with varying degrees of accuracy. Nacha released the following statement yesterday, regarding the situation:


"Nacha advises individuals that think they have been negatively impacted by to notify and file an unauthorized ACH transaction form with their bank or credit union.


Reversing a valid payroll deposit is not permitted under the Nacha Rules that govern the ACH Network. Nacha is investigating the responsible parties, and is working with financial institutions to undo or remedy any invalid transactions."


While there is still work to be done to determine what happened, our takeaway remains, how the reversals were used in this case is not permitted under the Rules. Consumers may return the reversals up to 60 days from settlement date of the reversal as unauthorized. If the entries were coded as PPD, the appropriate return code to use is R10, while entries coded as CCD should be returned as R05. A WSUD is required for both scenarios. RDFIs will receive the quality fee of $4.50 for each return submitted using either the R10 or R05.


The ODFI is currently reaching out to financial institutions requesting RDFIs to return the item as R06, which carries an indemnification. The Rules do not require the RDFI to obtain a letter of indemnification, but individual financial institution policies may require this step to be taken, NEACH encourages FIs to check their policies. While there is not a timeframe restriction for an R06, it does require that you first receive the request from the ODFI. Under the Rules, financial institutions can not send an R06 without first receiving a request from the ODFI.


On a broader note, Direct Deposit is used by over 90% of Americans. With the media attention around this developing situation, it is important to remind customers/members that direct deposit activity is governed by a set of Rules and standards that include protections for consumers.


NEACH will continue to release information on this situation as appropriate and stands ready to assist members in any way. We encourage members to utilize the Payments Hotline (1-855-NEACH-QA) for all questions/concerns. 




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