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Resolving ACH Payment Blocks: Understanding R08, R16 and R29 Return Codes

Introduction

ACH payments can sometimes be blocked due to specific return codes. Three common return codes are R08, R16, and R29. This article explains what these codes mean and how to resolve them.

Understanding Return Codes

R08 – Payment Stopped

This code indicates that the customer has placed a stop payment order with their bank, preventing the debit from being processed. To resolve this, contact the customer to confirm whether the stop payment was intentional or an error. Once confirmed, the block can be removed, allowing the customer to reattempt the payment.

R16 – Frozen Bank Account

This code means the customer's account has been frozen or placed on an OFAC hold, preventing any ACH activity. The customer must contact their bank to determine the reason for the freeze and confirm once the restriction is lifted. Until then, ACH debits cannot be attempted.

R29 – Corporate Customer Advises Not Authorized

This code is returned when a business (corporate account holder) notifies its bank that the debit entry was not authorized. It typically applies to CCD (Corporate Credit or Debit) and CTX (Corporate Trade Exchange) transactions.

Required Documentation

  • R08: Obtain confirmation from the customer that the stop payment has been removed.

  • R16: Acquire a letter from the bank stating that the account is active again.

  • R29: Provide proof of corporate authorization, such as a signed ACH agreement or corporate authorization form. We may also need documentation from the bank stating that the block has been lifted.

Supporting details or screenshots should be shared to assist with next steps.

Understanding R29 Returns

R29 returns occur when a transaction is classified as unauthorized under Nacha Operating Rules. To comply with Nacha's strict 0.5% threshold for unauthorized return rates, accounts are automatically blocked when an R29 return is received.

Steps to Prevent R29 Returns

  1. Add Straddle's Company ID to Your Positive Pay List: Contact your bank to add Straddle's Company ID to your positive pay list. This will prevent future blocks on debits.

  2. Provide Proof: If requested, provide proof that the Company ID has been added to ensure smooth processing of future payments.

What to Do If a Block Occurs

If a block occurs due to an R29 return, inform Straddle Support that the issue has been resolved. They will manually remove the block, allowing you to reschedule payments.

Handling Recurring Issues

If payments continue to return with a "payment blocked" code, verify with your bank that the Company ID is correctly added and contact Straddle Support for further assistance.

Verifying ACH Authorization

Ensure your ACH authorization process is compliant. You may need to provide:

  • A copy of the signed agreement or digital mandate where customers agree to the debits.

  • Backend/system logs showing when authorization was captured (date/time, customer ID, and consent record).

This evidence confirms that the customer explicitly gave permission to debit their bank account.

Conclusion

By understanding these return codes and providing the necessary documentation, you can effectively manage and resolve ACH payment blocks. For further assistance, consider scheduling a call with our support team.

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