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A consumer customer revokes their authority for a preauthorized ACH. The company debits the account anyway. The customer fills out a WSUD stating the revocation (although they are not required to). The bank cannot charge a fee for the revocation (if the claim is found to be valid) because the transaction was unauthorized (Supplement to 1005.11(c)(3).
1. Is this correct?
And because this was a preauthorized debit that was revoked, the bank must block all future payments per Supplement to 1005.10(c)(2). The bank cannot charge a fee to block future payments due to the transactions being unauthorized.
2. Is this correct?I agree. However, I believe the OSI to 1005.11(c)(3) indicates that the Bureau discourages any fee on assertion of errors as it may prohibit consumers from invoking their error resolution rights.
This would be different from a stop pay. If you receive a stop pay on a recurring ACH I don’t any reason that you couldn’t charge your normal fees. It’s when it becomes an error or fraudulent that you shouldn’t charge a fee for stopping or correcting such activity as required by Reg E.
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