Automated Clearing House introduction
Pega Smart Dispute™ Agentic Automation (SDAA) offers an end-to-end dispute resolution process that is tailored for Automated Clearing House (ACH) transactions.
Automated Clearing House
ACH is a computer-based electronic network for processing transactions between participating financial institutions. Payments are electronically entered into the ACH network, and the Originating Depository Financial Institution (ODFI) aggregates and sends them to the ACH operator. The operator then distributes funds to receivers’ banks or Receiving Depository Financial Institutions (RDFIs), ensuring secure and efficient electronic fund transfers in a systematic process. The National Automated Clearing House Association (NACHA) manages, develops, and governs the ACH in the United States.
Standard Entry Class codes
A Standard Entry Class (SEC) code describes how payment was authorized by the consumer or business receiving an ACH transaction, and is also maintained by NACHA. The SEC codes and their titles are shown in the following table:
|
SEC code |
Title |
|
ARC |
Accounts Receivable Entry |
|
BOC |
Back Office Conversion Entry |
|
CCD |
Corporate Credit or Debit Entry |
|
CIE |
Customer Initiated Entry |
|
CTX |
Corporate Trade Exchange |
|
POP |
Point of Purchase Entry |
|
PPD |
Prearranged Payment and Deposit |
|
RCK |
Re-presented Check Entry |
|
TEL |
Telephone-Initiated Entry |
|
WEB |
Internet Initiated/Mobile Entry |
Return codes
ACH return codes identify the reason for an ACH payment being returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures.
For an ACH transaction that is to be submitted for NACHA return, a return code must be determined and associated with the dispute reason and available transaction details. The generated return is then sent in the returns file that is shared with NACHA.
The are several ACH return codes available but SDAA supports only the following return codes. SDAA supports only the return codes for the issues raised by customers. The return codes, their descriptions, and their eligibility criteria are shown in the following table:
|
Return code |
Description |
Eligible criteria |
|
|
Consumer accounts |
Business accounts |
||
|
R10 |
Originator is not known to Receiver, and/or Originator is not authorized by Receiver to debit their account. |
Dispute reason: Unauthorized debit |
Applicable SEC codes: PPD, CIE, TEL, WEB
|
|
SEC codes not applicable: CCD, CTX, ARC, BOC |
|||
|
The dispute must be raised within 60 days from the transaction posted date. |
|||
|
R11 |
Customer advises Entry is not in accordance with the terms of authorization. |
Dispute reason: Instructions not followed |
|
|
SEC codes not applicable: CCD, CTX, ARC, BOC, POP, RCK |
|||
|
The dispute must be raised within 60 days from the transaction posted date. |
|||
|
R05 |
Unauthorized debit to Consumer account using a Corporate SEC code. |
Dispute reason: Unauthorized debit |
|
|
SEC codes applicable: CCD, CTX |
|||
|
The dispute must be raised within 60 days from the transaction posted date |
|||
|
R07 |
Authorization revoked by customer |
Dispute reason: Revoked authorization |
|
|
SEC codes not applicable: CCD, CTX, ARC, BOC, POP, RCK |
|||
|
The dispute must be raised within 60 days from the transaction posted date |
|||
|
R29 |
Corporate Customer Advises Not Authorized |
|
Dispute reason: Unauthorized debit |
|
SEC codes applicable: CCD, CTX |
|||
|
The dispute must be raised within 2 banking days from the transaction posted date |
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|
R31 |
Corporate Customer Advises Not Authorized |
|
Dispute reason: Unauthorized debit |
|
SEC codes applicable: CCD, CTX |
|||
|
The dispute was not raised within 2 banking days from the transaction posted date. |
|||
|
R24 |
Duplicate entry |
Dispute reason: Instructions not followed |
Dispute reason: Instructions not followed |
|
SEC codes not applicable: CCD, CTX, ARC, BOC, POP, RCK |
SEC codes not applicable: CCD, CTX, ARC, BOC, POP, RCK |
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|
The dispute must be raised within 2 banking days from the transaction posted date |
The dispute must be raised within 2 banking days from the transaction posted date |
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