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So, an entity that's set up with an ODFI can initiate arbitrary debits to arbitrary accounts, with no action by the owner of the debited account. What happens i

by jarrett 12y ago

So, an entity that's set up with an ODFI can initiate arbitrary debits to arbitrary accounts, with no action by the owner of the debited account. What happens if that privilege is abused? Is it like chargebacks with credit cards? What if the debit is so small the victim doesn't notice?

logicalmind 12y ago
There is a strict system in place for violating the rules: https://www.nacha.org/NSfines https://www.nacha.org/NSfines But if things occur on accident, there is a "Returns" process for handling it. It looks like the author intends to cover that, at least partially, in the next installment. Here is a list of return codes if you want a hint: http://www.mainstreetmerchantsolutions.com/ach-return-codes http://www.mainstreetmerchantsolutions.com/ach-return-codes
notdonspaulding 12y ago
There are all sorts of policy-based resolution methods in the ACH world. But there is nothing technologically restricting arbitrary debits/credits to arbitrary accounts in arbitrary amounts. One policy meant to deal with this is called "Velocity limits" which is basically a rate-limit of how much the OFDI will underwrite your account for. i.e. You can debit up to $50,000/day and then your OFDI will cut off further ACH transactions until some of your outstanding ones have settled. Another policy is that (for Check21 checks processed via ACH anyway) the checking account owner has up to 60 days from the statement date to dispute the charge, meaning the ACH transaction can be reversed up to 90 days after it was initiated. It's straight out of the 60's. And on one hand, it's cool that everybody uses this system and nobody notices how old it is. On the other hand, it's freaky when you realize that every time you swipe a debit card or write a check, you've basically handed over all the credentials needed for that person to debit your account as much as they like (until they're discovered). Also, remember that automatic deposit implies automatic withdrawal. ACH systems are by far the craziest API integrations I've ever had to do.

by jarrett 12y ago

logicalmind 12y ago

There is a strict system in place for violating the rules: https://www.nacha.org/NSfines https://www.nacha.org/NSfines But if things occur on accident, there is a "Returns" process for handling it. It looks like the author intends to cover that, at least partially, in the next installment. Here is a list of return codes if you want a hint: http://www.mainstreetmerchantsolutions.com/ach-return-codes http://www.mainstreetmerchantsolutions.com/ach-return-codes

notdonspaulding 12y ago

There are all sorts of policy-based resolution methods in the ACH world. But there is nothing technologically restricting arbitrary debits/credits to arbitrary accounts in arbitrary amounts. One policy meant to deal with this is called "Velocity limits" which is basically a rate-limit of how much the OFDI will underwrite your account for. i.e. You can debit up to $50,000/day and then your OFDI will cut off further ACH transactions until some of your outstanding ones have settled. Another policy is that (for Check21 checks processed via ACH anyway) the checking account owner has up to 60 days from the statement date to dispute the charge, meaning the ACH transaction can be reversed up to 90 days after it was initiated. It's straight out of the 60's. And on one hand, it's cool that everybody uses this system and nobody notices how old it is. On the other hand, it's freaky when you realize that every time you swipe a debit card or write a check, you've basically handed over all the credentials needed for that person to debit your account as much as they like (until they're discovered). Also, remember that automatic deposit implies automatic withdrawal. ACH systems are by far the craziest API integrations I've ever had to do.