Check
Q.) Your accountholder informs you that they mailed a check payable to a merchant, but the merchant is saying they never received the payment. Your accountholder is coming to you because the check they mailed was cashed, and they are looking for help on how to resolve the issue. How can you help?
A.) This situation can happen for many reasons. You may wish to research the item to determine if it may have been altered or possibly credited to the wrong payee erroneously. As a general matter, in both these situations, the Depositing Bank is liable (subject to certain defenses), and you can rely on the Presentment and Transfer Warranties found in UCC Articles 3 and 4, specifically sections 3-416, 3-417, 4-207 and 4-208. In laymen’s terms, under these provisions the person (or entity) that presents/transfers the item warrants that they are in fact the person entitled to enforce an instrument and that the instrument has not been altered.
As the Paying Bank, you will have to deal directly with the Bank of First Deposit (BOFD) to recoup these funds.
ACH
Q.) When returning any federal post-death benefits, regardless if it's to respond to a DNE or finding out one of your accountholders has passed, it's important that these returns are done properly. What happens if there is an error related to a return of a post-death federal benefit
A.) When returning post-death federal benefits, errors can happen. For example, an RDFI may improperly return the wrong items, or the return reason code may be incorrect. To fix these types of errors, you need to contact the federal agency that authorized the payment. Chapter 4 of The Green Book: A Guide to Federal Government ACH Payments, provides you a list of the federal agencies with the appropriate contact information. This chapter also informs you that you are not required to provide credit to the Receiver for any payments received in error. But if you make the business decision to do so, make sure you inform the federal agency when you contact them about the error made.
The Green Book is a great resource that can help walk you through various situations as you deal with federal benefit payments. Remember to save this resource in your bookmarks, as opposed to downloading or printing it. This resource is updated periodically and you want to be sure to have the most up-to-date information available.
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