When processing ACH payments, there may be instances where transactions are returned by the customer’s bank. Returns typically happen due to issues like insufficient funds, closed accounts, or unauthorized transactions. Each returned transaction is associated with an R Code, which identifies the reason for the return.
You can find a full list of R Codes and their meanings in the CSG Forte Support Center.
Common Return Scenarios
R01 – Insufficient Funds: The account doesn’t have enough money to cover the transaction.
R02 – Account Closed: The receiving account is no longer active.
R03 – No Account/Unable to Locate Account: The account details were invalid.
… and many more.
Chargebacks: What You Need to Know
Some ACH returns may be classified as chargebacks, which occur when a customer disputes a transaction with their bank. These are typically tied to authorization issues and fall under specific R Codes:
| R Code | Description |
|---|---|
| R05 | Unauthorized Debit Using Corporate SEC Code |
| R07 | Authorization Revoked by Customer |
| R10 | Customer Claims Unauthorized, or Improper Authorization |
| R29 | Corporate Customer Advises Not Authorized (Requires Company ID letter) |
Time Frame & Right of Return
Customers have 60 calendar days from the settlement date to dispute an ACH transaction through their bank. If they do, they are entitled to what’s called the Right of Return, and the bank can return the funds without needing to notify the merchant (you).
The customer must fill out and sign a Written Statement Under Penalty of Perjury (WSUD) and submit it to their bank, who then processes the return.
After 60 Days: Proof of Authorization
After the 60-day window, if a customer still wants to dispute a transaction:
The bank must request a copy of the original authorization from the merchant.
If you have proper documentation (like a signed agreement), you can provide it as proof.
This may help protect your business from potential disputes and give you legal standing to pursue collections or other remedies outside the ACH Network.
? Forte can retrieve a copy of the WSUD for a $35 fee.
However, Forte does not directly dispute ACH chargebacks on your behalf.
Please refer to the updated Solutions:
- Proof Of Authorization and NACHA requirements : Support Services
- ACH Standard Entry Class Codes : Support Services
- What are SEC Codes? : Support Services
- Understanding SEC Codes : Support Services