R05

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High-Priority Return Code

This is a significant ACH return code that indicates either an SEC code mismatch (using corporate codes for consumer accounts) or an unauthorized transaction dispute. This return can occur up to 60 days after settlement and requires immediate attention to resolve authorization issues.

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Error message: "A CCD or CTX debit entry was transmitted to a consumer account of the receiver and was not authorized by the receiver."

What Causes ACH Return Code R05?

The R05 ACH return code means "Unauthorized Debit to Consumer Account Using Corporate SEC Code" and indicates that a business transaction was attempted on a consumer's personal account using the wrong SEC (Standard Entry Class) code. This return occurs when a corporate SEC code like CCD or CTX is used to debit a personal checking or savings account, or when the consumer disputes the transaction as unauthorized.

Unlike other return codes that indicate technical errors, R05 specifically addresses authorization and transaction classification issues. The consumer's bank has up to 60 days from the settlement date to return the payment with this code, giving consumers extended protection against unauthorized debits compared to most other ACH return types.

Can You Retry R05 Payments?

You cannot retry R05 payments without first resolving the underlying authorization or SEC code issue. If the return was due to an SEC code mismatch, you must reprocess using the correct consumer SEC code (PPD or WEB). If the return was a consumer dispute, you must contact the customer to resolve the authorization issue before attempting any new transactions.

Common Causes

Using corporate SEC codes (CCD/CTX) for personal bank accounts

Consumer disputes the transaction as unauthorized

Business account setup doesn't match customer account type

Merchant processed transaction without proper consumer authorization

Customer doesn't recognize the transaction or merchant name

Key Information

Return timeframe: Up to 60 banking days

Cannot be retried without resolving authorization issue

May require switching to consumer SEC codes

Consumer protection regulations apply

How to Respond to an R05 Code

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An R05 return indicates either an SEC code mismatch or unauthorized transaction dispute. Quick resolution requires verifying authorization and using the correct transaction codes for the account type.

When Your Customer's Payment Fails

Verify Customer Authorization
‍Contact the customer immediately to confirm they authorized the transaction and understand why it was disputed.
Check SEC Code Classification
‍Determine if you used corporate codes (CCD/CTX) for a personal account when consumer codes (PPD/WEB) were required.
Review Account Type Setup
‍Ensure your payment processing is configured for the correct customer account type (business vs. personal).
Reprocess with Correct Codes
‍If SEC code mismatch was the issue, reprocess using appropriate consumer transaction codes.

Email Template

Subject: Payment Authorization Verification Required

Hi [Customer Name],

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We received notice that your recent payment was returned due to an authorization issue. This may have occurred because we used the wrong transaction type for your account.

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Could you please confirm:

You authorized this payment from your account
Whether this is a personal or business bank account
If you recognize the transaction description on your statement

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We want to resolve this quickly and ensure we're processing your payments correctly going forward. Please call us at [phone number] so we can verify the details and reprocess your payment.

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Thanks,

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[Your Company Name]

When Your Payment to Vendors Fails

An R05 return on vendor payments suggests you may be using incorrect SEC codes for the vendor's account type or the vendor is disputing the transaction. This requires immediate clarification to maintain vendor relationships.