R16

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High-Priority Return Code

This ACH return code indicates that the receiving bank has frozen the account due to legal action, regulatory compliance, or instructions from OFAC (Office of Foreign Assets Control). R16 is a serious return code that requires immediate attention and may involve sanctions compliance, fraud investigations, or court-ordered restrictions that prevent any transactions from processing.

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Error message: "(1) Access to the account has been restricted due to legal action or specific action undertaken by the RDFI, or (2) The OFAC (The Office of Foreign Assets Control of the US Department of the Treasury) has instructed the Gateway or RDFI to return the Entry."

What Causes ACH Return Code R16?

The R16 ACH return code means "Account Frozen/Entry Returned per OFAC Instruction" and indicates that the receiving bank has blocked the transaction due to account restrictions. This can occur when legal action has been taken against the account holder, when the bank has identified suspicious activity requiring investigation, or when OFAC (Office of Foreign Assets Control) has flagged the account for sanctions compliance.

This return code serves as a critical security measure in the financial system to prevent transactions with accounts that may be subject to legal restrictions, fraud investigations, or federal sanctions. Banks are required to freeze accounts and block transactions when instructed by regulatory agencies or when legal circumstances warrant such action.

Can You Retry R16 Payments?

You cannot retry R16 payments until the underlying legal or regulatory issue is resolved and the account is unfrozen. This typically requires the account holder to work directly with their bank and potentially with legal authorities or OFAC to address compliance concerns. Any retry attempts before resolution will result in additional R16 returns.

Common Causes

Court-ordered account freeze due to litigation or bankruptcy proceedings

OFAC sanctions compliance requiring transaction blocking

Bank fraud investigation freezing account during review

Tax liens or IRS levies restricting account access

Identity theft investigation requiring account protection

Key Information

Return timeframe: 2 banking days

Cannot retry until legal/regulatory issues are resolved

Must cease all payment attempts to the frozen account

May require OFAC reporting obligations for your business

Account holder must work with bank to resolve restrictions

How to Respond to an R16 Code

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An R16 return indicates serious legal or regulatory restrictions that require immediate cessation of payment attempts and careful documentation of the situation for compliance purposes.

When Your Customer's Payment Fails

Stop All Payment Attempts Immediately
Cease any scheduled or pending payments to the frozen account to avoid additional R16 returns.
Document the Return Thoroughly
Maintain detailed records of the R16 return and related communications for potential compliance reviews.
Contact Customer Carefully
Reach out to understand if they're aware of the account restriction and can provide alternative payment arrangements.
Consider Compliance Obligations
If OFAC-related, consult with compliance experts about potential reporting requirements under U.S. sanctions laws.

Email Template

Subject: Payment Processing Issue - Account Restriction

Dear [Customer Name],

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We were unable to process your recent payment due to restrictions placed on your bank account by your financial institution. This may be related to security measures, legal requirements, or regulatory compliance.

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We've suspended all payment attempts to this account to prevent further processing issues. To resolve this matter, please contact your bank directly to understand the restriction and determine when normal account access will be restored.

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Once your account is available for transactions again, please let us know so we can arrange alternative payment processing. We're here to help you through this process.

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Best regards,

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[Your Company Name]

When Your Payment to Vendors Fails

An R16 return on vendor payments indicates the vendor's account has been frozen due to legal action, fraud investigations, or OFAC compliance requirements. This requires immediate action to maintain business relationships while ensuring compliance.

Stop all scheduled payments to the frozen account immediately
Contact the vendor to inform them of the account restriction
Request alternative payment arrangements or updated banking information
Document all communications and maintain compliance records for potential regulatory review