Skip to content
Breadcrumbs

TINS Direct Deposit Web-Based Training

Lesson 8: Payments Returned or Made in Error

Reversals

There are instances when a direct deposit payment was processed in error and the agency needs the funds returned. The automated clearing house (ACH) network provides for the reversal of an erroneous direct deposit payment. A reversal is an attempt to retrieve the funds; it is not a guarantee the funds will be returned.

Contacting an RDFI

Agencies must not contact a payee’s receiving depository financial institution (RDFI) to request an erroneous payment be returned or reversed. Per Nacha rules, reversals must be made through the ACH network and only by the originator of the payment, the Comptroller’s office.

Agencies may contact the payee’s RDFI using the contact information provided by the payee or displayed on the BANKIN screen (Lesson 3) to:

  • Confirm account information.
  • Assist its payees in tracking their direct deposit payments.
  • Check if funds have been returned.

Note: Keep in mind that most financial institutions will not release information to any party other than their account holder.

Reversal Requirements

Each agency is responsible for requesting its own reversals via the Direct Deposits – Reversals and Reclamations (DDEP) new window web application. DDEP also provides an ACH trace number for each direct deposit payment; the payee’s RDFI may require the trace number when tracking a payment through the ACH network. Security access to DDEP is required; contact your agency security coordinator as needed.

Nacha sets the rules for a reversal:

  • The reasons for a reversal are restricted to:
    • Incorrect payee.
    • Incorrect payment amount.
    • Duplicate payment.
    • Incorrect payment date.
  • The deadline for processing a reversal is within four banking days from the settlement date of the payment. DDEP has built-in edits to ensure the reversal date meets the Nacha requirement.
  • An agency must notify payees when their payments are being reversed. DDEP has built-in edits to ensure the notification date meets the Nacha requirement. The notification may be provided via any of the following:
    • Phone call: Retain documentation of the call, such as time and date, for audit purposes.
    • FAX
    • Letter
    • Email

Erroneous payments issued for any other reason than the four listed above must be retrieved directly from the payee.

Reversal Reports

Daily reports listing successful and rejected reversals are available to the agencies. They serve as the agencies’ notification and disposition of their reversal requests.

  • If the reversal is successful, the funds are credited to the agency through USAS to the default funds listed in Returned Money Items in this lesson.
  • If the reversal is unsuccessful, the RDFI returns an NOC with the return reason code (RXX) for the rejected reversal request. These do not display on PMTHIS. If the reversal is rejected due to insufficient funds, the agency must work with the payee to recover the funds. Nacha requires the entire amount of the payment to be returned in full; a partial amount is not allowed to be returned.

See Reversal/Reclamation Reports new window in TexPayment Resource for more information about these daily reports. Reclamations apply only to annuity payments issued by the three state retirement systems.

For more information about erroneous direct deposit payments and DDEP, see the following topics in TexPayment Resource:

Next: Reversal Request Form