You can find out where an electronic deposit came from by requesting your bank to initiate a trace request using the originator identification number and ACH item trace number. The originator identification number is used to identify the merchant sending or receiving the payment. The ACH trace number is unique to every transaction that is initiated using the ACH system.
How to Trace an Electronic Payment
An electronic payment can be traced using the ACH trace number and originator identification number. Every electronic payment is initiated using these two crucial sets of information. When you bank submits a trace request tot he ACH department, it will receive a response on who the originator of the payment is. For example, if you see a debit on your account for IND ALL SAVINGS, it is for Industrial Alliance.
It is easy for your bank to trace an electronic payment. However, if there is a middle bank or processing bank in-between, it can take a while.
If there is an unknown money deposited in your account; your bank will be able to tell if a deposit was an electronic deposit or a deposit made by you or someone else in-branch.
Can an Electronic Deposit be Reversed?
An electronic deposit can be reversed or returned. If the originator has made an error or if the bank deems it is not meant for you – they can return the electronic payment. As per CPA guidelines, the bank has to return the payment within 90 days of receiving.
What Happens if an ACH Payment is Returned
When an ACH payment is returned, it is sent back to the originator (merchant or person who initiated the request). A returned ACH payment is reflected in the other parties account within 1-2 business days. There are a few reasons why an ACH payment may be returned:
- It was sent to the wrong account
- It was sent to a closed account
- It was sent in the wrong amount
- It was not meant to be sent at that time
If you want to reverse an ACH payment, you have to contact your bank. Keep in mind that once an electronic payment has been initiated, it cannot be deleted or reversed. It needs to be returned, so you will be out of those funds for the time-being.
Can an ACH Payment be Declined?
An ACH payment request can get declined if there are no funds in the payer’s account or if a stop payment has been placed. An account with insufficient funds will not get debited, and the payment can get declined.
If you want to place a stop payment on an electronic payment such as a car loan payment, insurance payment, lease payment or merchant billing payment, do the following. You will need to ask your bank to place a stop payment on your account for the merchant in question.
The bank needs to make sure they are entering in the name of the merchant as it always appears on previous electronic payments. Additionally, you will need to provide the bank with the exact amount that would be debited from your account. A stop payment for a pre-authorized payment will usually stay active on your account for a period of six months.
Most merchants will try to initiate another request to collect payment. If the payment is not successful, the client may incur non-sufficient fund charges.
ACH Payment Insufficient Funds
ACH payments can take two to three business days to settle. When a payment is authorized, there may be sufficient funds in the account. However, when the payment settles – the customer may have already used the funds. In this case, the customer may go into an overdraft balance or they’ll get charged for NSF. Most banks charge $48.00 for NSF.
If an ATM deposit only settles in one business day due to a hold, and you’re making this deposit for an electronic payment – you may still receive an NSF charge. Here’s a real life example:
Let’s say you have $15.00 in your bank account on Saturday. You have a car lease payment that’s going to clear on Monday for $395.00. If you went to the bank today and deposited a cheque valued at $500.00 – this cheque may be placed on hold for 1-5 business days. This means that the $500.00 may show up in the account as deposited, but it is not available to you until the hold is expired. On Monday – the ACH payment request will come in for $395.00 from your dealer loan company and it will get declined.
Ask your bank about overdraft protection and if it’s available for you. Most banks will offer it for a monthly fee, but you can also choose to get it on a pay-per-use basis. You only get charged overdraft protection fees and overdraft interest if you go below your $0.00 balance.
Can You Put a Stop Payment on an Automatic Withdrawal?
You can put a stop payment on an automatic withdrawal, pre-authorized payment or recurring payments. You will need to provide your bank with a stop payment order at least 3 business days in advance, with the merchant name and transaction amount to put a stop payment. You can send the stop payment order by mail, phone or in-person at the branch.
However, you need to keep a few factors in mind. A stop payment is not always guaranteed to stop the payment, and here is why.
- The originator of the payment could change the originator name. If the name does not match the name on the stop payment request, the payment can still go through.
- If the payment has already been authorized, the stop payment will not be in affect to prevent the payment from going through.
- If the transaction amount changes for whatever reason, the stop payment will not stop the payment from getting processed. The amount of your payment can change if you are paying for a new car insurance policy (since you are paying two payments up front).
A stop payment order needs to be processed manually by someone at the back-office – if you are sending it in by mail or email. These requests are usually delivered at the branch end with high priority, but mistakes can happen. If a stopped payment still goes through your account; you need to contact your bank to notify them. If the bank is at fault, they should be asked to cover the lost funds.
Most banks will have stop payment clauses in effect which removes them from any fault – make sure to under the terms concerning ACH stop payments.