Previously, Receiving Depository Financial Institutions (RDFIs) would send a Notification of Change – C04 to request a correction to the Receiver’s name on future ACH transactions. This sometimes created challenges for Originators, ODFIs and RDFIs. An example was when the Biller (Originator) could not make the requested name change due to contractual or other reasons while the Original Depository Financial Institution faced NACHA violations for not updating the name. To eliminate this risk the C04 code will be removed as a valid change code.
Impact to ODFIs / Originators
If you are an ACH Originator and the Receiver’s name on the ACH transaction and Receiver’s name at the RDFI do not match, rely on contracts and records to properly identify the name of the Receiver being credited or debited, without relying on a Notification of Change (NOC) from the RDFI
Impact to RDFIs
When the RDFI discovers a name mismatch, choose one of the following courses of action:
There are two new return codes to assist Originators, ODFIs, and RDFIs to rectify situations in which the reversal process resulted in, or didn’t resolve unintended credit to the Receiver.
Originators and ODFIs can use the new R62 (Return of Erroneous Debit or Reversing Debit) only in the following situations:
If you are an ACH Originator, you can request that your ODFI dishonor a return in order to correct and resolve an erroneous or unintended credit to a Receiver.
In addition, ensure that R62 is only used when the associated credit entry (the Reversal or the erroneous credit) was not also returned by the RDFI.
RDFI’s can use the new Contested Dishonor R77 (Non-Acceptance of R62 Dishonored Return) if either of the following situations exist.
ABC Company sends two ACH Credit transactions to Receiver A in error and subsequently sends a reversing ACH Debit to Receiver A to correct the error. Both ACH Credit transactions post to Receiver A’s account. If Receiver A returns the reversing ACH Debit to ABC Company and keeps the erroneous ACH Credit, ABC Company can dishonor the return of the reversing ACH Debit with an R62 return reason code. However if Receiver A’s Bank returned both the erroneous ACH Credit and the reversing ACH Debit to ABC Company or if Receiver A no longer has the available funds in their account, then Receiver A’s Bank can Contest the Dishonored Return with an R77 reason code.
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