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ACH return R10 Counts toward unauthorized return rate

Customer Advises Originator is Not Known to Receiver and/or Originator is Not Authorized by Receiver to Debit Receiver’s Account

Category: Authorization & consumer dispute Initiated by: RDFI

Applies to (SEC scope)

ALL EXCEPT CCD, CTX

camt.053 mapping

AG01 — Transaction Forbidden

ISO code shared with other Nacha codes

Reinitiation

Do not debit again without a new authorization

Nacha's definition

RDFI has been notified by the Receiver that the Receiver does not know the identity of the Originator; has no relationship with the Originator; or has not authorized the Originator to debit his account.

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: ALL EXCEPT CCD, CTX.

How it appears in an ISO 20022 statement

Nacha's mapping guide maps R10 to camt.053 reason code AG01 (Transaction Forbidden) — ISO definition: Transaction forbidden on this type of account (formerly no Agreement) Nacha marks this ISO code as mapped to more than one Nacha return code, so the ISO code alone does not identify the Nacha reason; read the narrative or the original return record.

Return time frame

Nacha's rule page on reinitiation describes R10 as the code "currently used for Extended Returns", for which the RDFI must obtain the Receiver's Written Statement of Unauthorized Debit. Nacha's R10/R11 rule page states that R11 returns have many of the same requirements and characteristics as an R10 return, and that R11's return time frame is 60 days. Nacha's public pages do not state R10's own day-count directly; the extended time frame is set in the Nacha Operating Rules.

Source: Nacha — rule page 'Differentiating Unauthorized Return Reasons' (R10 / R11; effective 1 April 2020 and 1 April 2021)

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." A debit is not treated as a reinitiation if the Originator obtains a new authorization after receiving the return. Nacha's R10/R11 page adds the contrast: R11 permits correcting and resubmitting without a new authorization; R10 does not.

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

PaymentBrief guidance, not Nacha text

treat the authorization as absent, stop billing, and obtain a fresh authorization 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

The Receiver says they do not know you or did not authorize you. Treat the authorization as absent: stop billing, keep your authorization evidence ready for your ODFI, and do not debit again without a fresh, valid authorization. Since April 2020 an error on an otherwise authorized payment comes back as R11 instead — if you are seeing R10 for what you believe are authorized relationships, review how the authorization was captured.

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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