While all returns can have an impact on your account, some are more serious than others. These are referred to as “Category 3 Returns”. They include some of the following:
- Altered/Fictitious – This return generally refers to an account that doesn’t exist or in some way the eCheck
draft has been altered or forged.
- Closed Account – As it states, the account holder’s account has been closed with a return of the eCheck draft.
- Frozen/Blocked - A frozen or blocked account can occur for many reasons including IRS tax liens, wage garnishments, court orders or other legal reasons that the bank can be required to freeze an account. There are no re-deposits of the same eCheck. A new one must be procured.
- Not Authorized/Counterfeit – These returns are generated by the account holder disputing the item during the payment presentment process or if a particular block is noted on the account such as “no drafts” or “no debits”. Items marked as such cannot be re-deposited.
- Refer to Maker – In order to determine why this return occurred, one would need to contact the account holder for the reason or, if they did not know, they would have to contact the bank to determine the reason. The merchant cannot obtain this information from the account holder’s bank.
- Stop Payment – The account holder in this case can contact the bank prior to the eCheck being presented for payment and request that payment is stopped. No information other than the check number, amount and payee is required to reject this transaction.
- UCF-Uncollect – A return of this nature indicates the funds in the account are not yet available. This can happen when a deposit into the account holder’s bank has not yet cleared in time to settle the new eCheck transaction.
No matter how diligent you are in your efforts, you will always see returns you could have done little to prevent. That being said, you do have the ability to affect the outcome of many by maintaining certain business practices which we have addressed in our good practices for eCheck billing post.
"you do have the ability to affect the outcome of many..."