Check Processing

R12 ACH Return Code: Branch Sold to Another DFI

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ach return code r12

Did you receive an ACH return code r12? Knowing how to use ACH return codes will help your company function successfully. If an ACH payment is not accepted, you can trace the issue to a specific code and determine the issue. There are over 80 ACH error codes, each of which offers information on why an ACH payment has stopped.

Therefore, it is necessary to grasp the ACH procedure before knowing more about ACH return code R12 and its meaning. ACH is an acronym for Automated Clearing House, which is an electronic method for transferring funds electronically between accounts.

Before moving on, it is important to define ODFI and RDFI, and the role they play in ACH payment processing. Check out the linked articles for an explanation of these terms

In the case of an R12 return code, the payment is reversed because the branch destination is no longer valid. In other instances, payments may be returned because of insufficient funds, a canceled authorization, or human error. NACHA, or the National Automated Clearing House Association, manages the use of the codes.

What Does ACH Return Code R12 Mean?

An ACH return code R12 indicates the bank was sold to another DFI a.k.a. Depository Financial Institution (recipient’s bank). The bank received a transaction entry for an account/bank that was acquired by another financial institution. For a brief period of time, the purchasing bank will continue to accept the routing number intended for the purchased bank.

Formal Definition

Despite the fact that a branch has been sold to another financial institution, they may continue to receive entries for accounts at the old branch. When this happens, an ACH return code R12 will tell you what you need to know. Due to the fact that the RDFI no longer maintains the account and cannot publish the entry, it must send the entry to the ODFI for correction and processing.

Solutions to Fix an R12 Return Code

To correct the entry for an R12 ACH return code, you need to get the account information and routing number for the new entry. This type of transaction is part of a notification of change (NOC). For example, if a routing number is incorrect, you must update and resubmit the outdated information via a NOC.

If the transaction is part of a schedule of recurring payments, make sure you update the payment schedule with the new account details.