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ACH return R05 Counts toward unauthorized return rate

Unauthorized Debit to Consumer Account Using Corporate SEC Code

Category: Authorization & consumer dispute Initiated by: RDFI

Applies to (SEC scope)

CCD, CTX

camt.053 mapping

AG03 — Transaction Not Supported

Reinitiation

Do not debit again without a new authorization

Nacha's definition

CCD or CTX debit Entry was transmitted to a Consumer Account of the Receiver and was not authorized by the Receiver.

Verbatim from Nacha — ISO 20022 Guide to Mapping U.S. ACH Return Items and Notifications of Change, August 2023, Version 2.01 (Table 1, return reason codes) (return reason code table). Applies to: CCD, CTX.

How it appears in an ISO 20022 statement

Nacha's mapping guide maps R05 to camt.053 reason code AG03 (Transaction Not Supported) — ISO definition: Transaction type not supported/authorized on this type of account

Return time frame

Nacha groups this code with the unauthorized debit return codes — R05, R07, R10, R29 and R51 — for its unauthorized entry return rate. The specific return time frame for this code is set in the Nacha Operating Rules and is not stated on the public Nacha pages used here.

Source: Nacha — rule page 'ACH Network Risk and Enforcement Topics' (unauthorized return rate threshold; reinitiation of entries)

Can the entry be reinitiated?

Nacha's reinitiation rule page is explicit: "an unauthorized debit cannot be remedied. Reinitiating any entry that was returned as unauthorized would be considered an improper reinitiation practice." The same page states that a debit is not considered a reinitiation if the Originator obtains a new authorization after receiving the return.

Source: Nacha — rule page 'ACH Network Risk and Enforcement Topics' (unauthorized return rate threshold; reinitiation of entries)

PaymentBrief guidance, not Nacha text

obtain that new authorization (and, for R05, use the correct consumer SEC code) before any further debit.

Unauthorized return rate

Nacha counts this code toward an Originator's unauthorized entry return rate, whose threshold Nacha set at 0.5 percent. Each return under this code moves that ratio for your ODFI, independently of the money involved.

Source: Nacha — rule page 'ACH Network Risk and Enforcement Topics' (unauthorized return rate threshold; reinitiation of entries)

What an operator does next

A CCD or CTX debit hit a consumer account without authorization — usually a wrong SEC code on a consumer relationship. Fix the SEC coding for that Receiver, obtain a consumer authorization, and treat the return as an unauthorized-rate event for your ODFI.

PaymentBrief guidance, not Nacha text. Your ODFI's procedures and the current Nacha Operating Rules govern.

Where this comes up on PaymentBrief

Confidence: high. Status: verified. The Nacha Operating Rules govern. Nacha sells them and they were not used here; every statement above is taken from a public Nacha document or a public US Treasury or Federal Reserve document, named per statement. Where those documents are silent, this card says so of those documents — it is not a claim about everything Nacha has published.

Sources for this code

Related codes

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