R16

What Is ACH Return Code R16?

ACH return codes are used to identify the reason an ACH payment has been returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures.

ACH Return Code R16, also known as "Account Frozen," is a standard code used in Automated Clearing House (ACH) transactions. It indicates that the account involved in the transaction has been frozen, preventing any debits or credits from being processed. Freezes can be placed on bank accounts for a variety of reasons, including fraud or suspected fraud, legal orders, or account maintenance issues.

How To Address ACH Return Code R16

Nacha prescribes separate rules for handling each return code since each one represents a unique scenario. ODFIs (Originating Depository Financial Institutions) and RDFIs (Receiving Depository Financial Institutions) are responsible for handling ACH return codes according to these rules.

For example, if your business is attempting to initiate an ACH debit for $100, but your customer’s bank account has been frozen for suspected fraudulent activity, the bank would return the transaction with code R16. The customer’s bank must return the transaction with code R16 within 2 banking days.

If you encounter R16, the first course of action is to reach out to your customer to see if the account has since been unfrozen or to have them provide you with alternate payment information to process the transaction. You can also reach out to the financial institution to inquire about why the freeze was placed on the account.

What Is An ACH Return Code?

ACH return codes identify the reason an ACH payment was returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures. Each code begins with 'R' followed by a two digit number. ACH return codes are standardized and maintained by NACHA, the governing body for the ACH network.