How and when does ACH return occur?

How and when does ACH return occur?

ACH return notifies the ODFI that the ACH network couldn’t withdraw or receive funds from the receiver’s bank account.

ACH return is 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, the RDFI files an automatic ACH Return with the ODFI.
  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. Must receive the request to file the return within 24 hours.
  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.

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