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Q) We have an accountholder that has had a series of ACH debits coming out of their account for several years and now is claiming that they're unauthorized. Can I ask the Originating Depositary Financial Institution (ODFI) to accept all of them back?
A) In 2021, Nacha introduced their Limitation on Breach of Warranty Claims, placing an official timeline on how long an Receiving Depositary Financial Institution (RDFI) has to make a claim against an ODFI for breach of the authorization warranty under the Nacha Rules. And the time limits are set by account type. (For your reference, the following information can be found in Chapter 6 of the 2024 Nacha Rules & Guidelines. Chapter 6 also provides more details.)
Business Accounts: When we say business accounts, what we really mean, for all intents and purposes of this discussion, is non-consumer accounts. The RDFI can make a claim to the ODFI for an entry up to one year from the Settlement Date of that entry.
Consumer Accounts: Consumer accounts are a little tricky because they have two deadlines. The first is that the RDFI can make a claim to the ODFI for an entry for up to two years from the Settlement Date of the entry. If a consumer has a series of unauthorized debits that exceeds two years, an RDFI may also make a claim to the ODFI for entries settling within the first 95 calendar days from the Settlement Date of the first unauthorized debit to the consumer account. When you don't have a specific scenario, that can be a lot to work through, so Nacha has a Warranty Claims Tool on their website that guides you on your specific scenario, to help you determine what you, as the RDFI, may be in a position to recover from the ODFI.
See the FAQ on Nacha's website for answers to questions like: 'Does this rule extend or have any impact on the ACH network's return time frame for unauthorized debits?' and 'Does a timely warranty claim by the RDFI guarantee the return of funds from an alleged unauthorized debit entry(ies)?'
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