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Guide To Handling ACH Disputes And Rules For Businesses

Imagine the thrill of running an online store curating unique gifts for children. Then, out of the blue, you get a call from an event management company. They're planning a series of extravagant birthday parties and need 500 personalized silver plates. Your heart soars with the possibilities! 

Fast-forward a few days, and you receive a bank notification regarding an ACH dispute—the customer claims they never authorized the payment! Now, you’re in a fix. Why did the customer file a dispute? Where did you go wrong? This guide on ACH dispute rules for business accounts will not only help clear your doubts about this unexpected setback but also empower you with the knowledge and confidence to handle such situations effectively.

Introduction to ACH Disputes and Rules

Have you ever used your phone to buy something online, like a new video game or a cool gadget? How did you pay for it? Did you just tap on your phone and send the money from your bank to the seller’s bank? That's what we call an ACH (Automated Clearing House) payment.

It's an electronic payment made through the Automated Clearing House Network. As it involves direct bank-to-bank transactions, you can transfer money without using checks, credit cards, or debit cards.

A special group called the National Automated Clearing House Association (NACHA) plays a crucial role in this process. They diligently monitor all these ACH payments, ensuring everything goes smoothly.

They're like the safety inspectors for the money machine, providing a solid sense of security and reliability to the process!

But do you think ACH payments are that simple? When you feel everything is perfect, something hard falls on you, disrupting your peace of mind. Like a ferocious lion waiting to pounce upon the gentle deer, problems arise from the bush.

Think about the situation we discussed earlier. We saw how the bank sent a notice to the online store, saying the customer never authorized the payment! This is called an ACH dispute.

An ACH dispute occurs when one party (usually the buyer) disagrees with the transaction of the other party (usually the seller). As ACH disputes can potentially disrupt your business flow, understanding and managing them is crucial.

By following ACH dispute rules for business accounts, you, the seller, the bank, and the customer can figure out what happened. This guide will be your trusted detective partner, guiding you to crack the case of the ACH dispute and keeping your money safe and sound!

Understanding ACH Disputes

An ACH dispute arises when a customer questions the legitimacy of an electronic funds transfer made through the Automated Clearing House (ACH) network. This network facilitates electronic payments like direct deposits, bill payments, and online purchases.  Suppose you run a subscription box service for dog treats. A customer might initiate a dispute if they claim they never signed up for your service, even though they received a box of treats.

Common Reasons for ACH Disputes

  • Unauthorized Transactions: A customer might claim they never authorized a payment, perhaps due to identity theft or fraudulent use of their account information.
  • Billing Errors: Sometimes, mistakes in the transaction amount, date, or service description occur. For instance, a customer might dispute a charge for $25 when they were expecting a $15 payment.
  • Negligence of Recurring Charges: Customers might forget they signed up for a recurring service and dispute subsequent charges. This could happen with your dog treat subscription box if the customer didn't realize they enrolled in a monthly plan.
  • Shipping of Erraneous Goods or Services: Customers file a dispute when they do not receive the product, get a different product than they ordered, or obtain a damaged product despite paying for it. 

How to Initiate a Dispute? The WSUD Process

How to Initiate a Dispute? The WSUD Process

If customers believe they have grounds for an ACH dispute, they can file a Written Statement of Unauthorized Debit (WSUD) with their bank. If you hold a corporate account, you must file the statement within 24 hours, whereas consumers have 60 days to file for the dispute. This document formally initiates the dispute process. The bank will then notify you, the business owner, and provide details about the disputed transaction.

ACH vs. Returns vs. Chargebacks: Understanding the Differences

Now that you understand how an ACH dispute arises, it’s time to dig into the terms: ACH returns and chargebacks. If the electronic transaction between the parties does not end in a dispute, one of the two things could happen:

  • ACH Returns: When paying by check, there are chances it will bounce back, aren’t there? ACH returns are like electronic bounced checks, wherein the bank sends a notification saying the transaction failed due to insufficient funds in the customer’s account or the account is closed. You must contact the customer and make alternate payment arrangements in such cases. The party responsible for the unsuccessful transaction must also pay an ACH return fee.
  • Chargebacks: Chargebacks are specific to credit card transactions and occur when a cardholder disputes a charge, leading to a reversed transaction. Let’s say you bought a toy online for your kid using a credit card. When you open the box, you see a damaged toy. Now, what will you do? You could contact the seller and ask for a refund. But what if they refuse? You can dispute the charge with your credit card company, and they will initiate a chargeback. The credit card company takes the money from the seller's account and returns it to yours. The seller might also have to pay fees.

Here’s a table differentiating between ACH disputes, returns, and chargebacks:




ACH Dispute

ACH Returns





ACH Network

ACH Network

Credit Card Network


Initiated by






Reason for Dispute


Unauthorized transactions, billing errors, etc.

Insufficient funds, closed account, etc.

Unauthorized transactions, damaged goods, etc.




Businesses must respond with evidence

Transaction reversed automatically

Merchants may be liable for chargeback fees

Impact of Disputes on Businesses

ACH disputes can significantly impact your business, potentially delaying access to funds and harming your reputation. Hence, it is crucial to respond promptly and professionally to any disputes you receive and abide by ACH dispute rules for business accounts. 

  • Gather relevant documentation like customer agreements or order confirmations to support your case. 
  • Work with your bank to resolve the dispute effectively.

Consider a situation where you get an ACH dispute from a customer who claims they never authorized payment for a software program you sell. There was a misunderstanding—the customer thought they were signing up for a free trial, but they had unknowingly opted into the paid subscription plan. You can confidently resolve the dispute by promptly clarifying the terms of service and providing screenshots of the signup process, knowing that these strategies effectively handle ACH disputes.

Rules for Handling ACH Disputes

Rules for Handling ACH Disputes

Are you all set to tackle ACH disputes? Here are a few winning strategies and rules for settling ACH disputes for business accounts:

  1. Obtain Proper Authorization for Transactions: Once you seal the deal with the customers, get the green light for transactions in writing. You could use a signed agreement, a confirmation email, or a clear checkbox on your website during checkout. Ensure to document the approval of the customer charges.
  2. Offer Detailed Receipts: Think of receipts as your best friends! Every transaction receipt should be detailed and include the date, amount, service description, and contact information. A clear receipt helps everyone remember what they paid for.
  3. Maintain High-Quality Customer Service: Treat your customers like royalty! Excellent customer service can go a long way in preventing disputes. Be friendly, helpful, and responsive to any questions or concerns they may have. Sometimes, a simple conversation can clear up confusion and prevent a dispute.
  4. Provide Pricing Transparency: Be honest and upfront about your pricing.  Display the prices clearly on your website or storefront with no hidden fees. The more transparent you are about costs, the fewer surprises there will be for your customers.

These simple steps can significantly reduce the chances of facing an ACH dispute. Clear communication, happy customers, and honest pricing are the keys to smooth sailing with ACH payments! With Tratta, you get additional support to ensure your transaction authorizations are seamless and that providing detailed receipts is straightforward. This enhances customer satisfaction and reduces the likelihood of disputes.

ACH Reversals

Have you ever accidentally sent a payment twice to a company for a bulk order? In such cases, you can alert the company about the error and initiate a process with the bank to get the payment back. This is called an ACH reversal, which is like pressing the rewind button for the payment. Let’s learn more about this phenomenon to understand ACH dispute rules for business accounts better.

Unlike ACH returns, where the payment bounces back due to insufficient funds or closed accounts, ACH reversals happen due to a mistake. Although such situations are rare, they can confuse you. Let’s tackle the issue by first learning about the common reasons for ACH reversals.

Also Read: ACH vs Credit Card: Understanding The Differences And Benefits For Businesses

Reasons for ACH Reversals

  • Duplicate Payment: If you send the payment twice accidentally, you can request an ACH reversal.
  • Incorrect Payment Amount: You can claim an ACH reversal if the credited or debited amount is wrong.
  • Inaccurate Account Details: If you mistakenly provide an incorrect account number or name, you will get payment back through an ACH reversal.

How to Process an ACH Reversal?

If you believe you received or sent an ACH payment mistakenly, you have every right to claim it back. Just like there are ACH dispute rules for business accounts, you need to follow specific guidelines while processing your ACH reversal. Let’s look at how the process works below.

  • Once you notice an error in the ACH payment, reach out to the sender/receiver.
  • Notify the bank and request the RDFI (Receiving Depository Financial Institution) for the ACH reversal.
  • Inform the financial institution within 24 hours of noticing the error or within five days of initiating the reversal charge.

Impact of ACH Reversal on Your Business

ACH reversals can impact your business by delaying access to funds you were expecting, thus disrupting your cash flow and causing temporary inconvenience. The good news is that by understanding ACH reversals and your rights, you can take steps to minimize their impact. Here are a few tips:

  • Stay Organized: Keep meticulous records of your transactions, including customer information and receipts. It will help you track payments and identify any potential reversals quickly.
  • Communicate Clearly: Maintain clear communication with your bank. If you notice a missing payment or suspect a reversal, contact your bank immediately to investigate.
  • Review Your Processes: Regularly review your internal processes for accepting payments and ensure they comply with ACH regulations. It can help prevent errors that might lead to reversals.

By following these tips and understanding ACH dispute rules for business accounts, you can confidently navigate the world of ACH reversals. Remember, even though reversals can be frustrating, understanding them can help protect your business and keep your cash flow intact.

Regulations and Enforcement of ACH Rules

Remember those ACH dispute rules for business accounts we talked about? Well, a whole group of people make sure everyone plays by the rules—it's like the referees in a game! This group is called NACHA (National Automated Clearing House Association), and they're like the umpires for ACH payments. They set the rules for how long businesses must respond to disputes and how transactions should be authorized. Breaking these rules is a big no-no, or you will face consequences!

Think of a cricket match where no one abides by the rules. What if the batsman steps out of the crease while hitting the ball? That's an egregious violation, which means a business has significantly broken the ACH dispute rules. For instance, a company might ignore customer disputes or fail to secure customer information properly.

Just like in a game where someone keeps breaking the rules, there can be consequences for NACHA violations. These are called sanctions, which can involve fines or a ban from using the ACH network altogether! Not something any business wants, right?

Following the rules set by NACHA is essential for several reasons. First, it helps keep things fair for everyone involved—businesses and customers alike. Second, it helps prevent fraud and protects your business from getting into trouble. Finally, staying compliant shows that you're a responsible business that takes customer information seriously.

So, how can you stay on top of the rules and avoid any trouble? Here are a few tips:

  • Be a Rule Reader: Take some time to read up on the basic ACH dispute rules for business accounts. NACHA has a website with lots of helpful information.
  • Stay Updated: The rules can change sometimes, so checking for updates periodically is a good idea.
  • Ask Questions: If you need clarification, contact your bank or a financial advisor for help.

By following these tips and playing by the rules, your business will have a safe and successful landing with ACH payments!

Preventing ACH Disputes

If ACH payments open new doors of possibilities for businesses, ACH disputes stop them at the door. While handling ACH disputes and following the rules are manageable for companies, there are chances for them to go astray. Although you cannot guarantee to prevent ACH disputes completely, here are a few tips to make them much less likely to occur:

  • Simplify your Order-to-Cash Process: Every online customer looks for a smooth checkout process. Slow-loading pages, inaccurate product details, blurry images, etc., can hinder their experience. Hence, simplifying your order-to-cash process is essential to avoid confusion or potential disputes. Creating a user-friendly website with a secure checkout system will do the trick.
  • Install Anti-fraud Software: Like a guard dog protecting your house, anti-fraud software watches over your financial transactions. By installing this software, you can identify and prevent suspicious transactions and keep your business safe from disputes.
  • Maintain Accurate Records: Keep detailed customer information, including transaction history, order details, receipts, and account details. With these details, you can cross-check the credibility of a dispute and take proper steps.
  • Practice Effective Communication: Can you recollect the childhood game of passing the message? Weren’t you rolling on the floor with laughter when you heard the jumbled-up message by the last person? Think of the situation from the business viewpoint. Would the customers return to your services if the message was not clear and proper? Hardly no. So, communication is vital. To avoid misunderstandings and disputes, promptly address their concerns and doubts and clearly state your pricing, return policy, and terms and conditions.
  • Learn from Disputes: You only learn to ride a bike after tripping and falling, right? So, even if you go through a dispute once, take it as a learning experience. Try to understand where you went wrong and figure out what you can do to prevent such situations in the future. 

As we've discussed locking the front door to prevent disputes, it's time to peek into the shadows and see what we can do about those sneaky fraud attempts.

Fraud Prevention and ACH Chargeback Defense

While we can quickly solve disputes arising from misunderstandings and errors, you need to be wary of unauthorized transactions. You can handle ACH disputes and rules for business accounts by fighting off the sneaky villain—a fraud! Fraudsters are like financial ninjas, trying to steal your hard-earned money through fake transactions. But don't worry—we've got some gadgets and tricks to outsmart them!

Strategies for Minimizing Fraudulent Activity

You can do a few things to make it harder for fraudsters to trick your business. Here are some battle tactics:

  • Be a Codebreaker: Use strong passwords and verification methods for online transactions. This will make it harder for imposters to access customer accounts.
  • Double-Check Data: Take a moment to review customer information and order details, especially for large or unusual purchases. A little extra scrutiny can go a long way.
  • Partner Up: Consider using fraud prevention tools and services. These can help identify suspicious activity and protect your business from fraudulent transactions.

Ways to Handle Fraudulent ACH Claims

Even with the best defenses, sometimes a fraudulent ACH return might slip through.  But don't panic! Here's what to do:

  • Gather Evidence: Collect all the information you have about the transaction, including customer details and order records.
  • Fight the Charge: If you believe the return is fraudulent, dispute it with your bank. Provide them with the evidence you collected. You can take advantage of ACH dispute rules for business accounts here. Knowing your rules helps you build a strong case against the fraudulent claim.
  • Report the Crime: Consider reporting the fraudulent activity to the authorities.

Remember how detectives use clues to solve crimes? You can do the same with your business data! By analyzing your data, you can identify patterns in fraudulent activity.  This can help you understand your weaknesses and how to improve your fraud prevention strategies. Tratta's comprehensive dashboard offers insightful data, helping you monitor transactions effectively to prevent and quickly address issues.

Imagine a store with a bright, familiar sign – you know what we’re hinting at, right? The same goes for your business! Having a strong brand reputation builds trust with customers. It also helps prevent disputes in the first place because customers are more likely to recognize and trust legitimate transactions from your business.

Following these tips can significantly reduce the risk of fraud and fraudulent returns. Remember, extra caution and some detective work can go a long way in protecting your business and keeping your finances safe!

Now that we've got our detective hats firmly in place and our anti-fraud shields up let's wrap up our journey into ACH payments and disputes, shall we?


We covered a lot of ground, but you're now well-equipped to navigate the world of ACH payments. Remember, clear communication with customers, following sound security practices, and a basic understanding of ACH dispute rules for businesses can go a long way in preventing disputes and keeping your cash flow steady.

Running a business is challenging enough without having to deal with frustrating payment issues. That's where Tratta comes in! We offer a user-friendly platform that streamlines your payment processing while providing educational resources to keep you informed.  Don't let ACH disputes become a headache – let Tratta help you manage your finances with ease. Sign up for a free trial today and see how Tratta can empower your business!

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