Which of the following actions is prohibited under the NACHA rules for ACH transactions?

Which of the following actions is prohibited under the NACHA rules for ACH transactions?

• A. Returning a transaction without valid reason
• B. Transmitting unauthorized transactions
• C. Using correct transaction codes
• D. Communicating with the receiving bank

Answer: (B)

Transmitting unauthorized transactions is strictly prohibited under the NACHA rules for ACH transactions. This prohibition is fundamental to maintaining the integrity, security, and trust in the ACH Network. Unauthorized transactions refer to any ACH debits or credits that have not been properly authorized by the account holder, which can lead to financial harm or fraud. The NACHA rules define the authorization process and establish clear guidelines to ensure that all transactions have the consent of the parties involved. This includes obtaining explicit permission for debits to a consumer's account. Violating these rules by transmitting unauthorized transactions not only undermines the rights of consumers but can also expose the originating institution to liability and penalties. In contrast, returning a transaction without a valid reason is equally discouraged but isn't as fundamental as the prohibition against unauthorized transactions. Using correct transaction codes is essential for ensuring proper processing of transactions, and communicating with the receiving bank is necessary for operation within the ACH Network, particularly as it relates to clarifying instructions and addressing issues that may arise.

Transmitting unauthorized transactions is strictly prohibited under the NACHA rules for ACH transactions. This prohibition is fundamental to maintaining the integrity, security, and trust in the ACH Network. Unauthorized transactions refer to any ACH debits or credits that have not been properly authorized by the account holder, which can lead to financial harm or fraud.

The NACHA rules define the authorization process and establish clear guidelines to ensure that all transactions have the consent of the parties involved. This includes obtaining explicit permission for debits to a consumer's account. Violating these rules by transmitting unauthorized transactions not only undermines the rights of consumers but can also expose the originating institution to liability and penalties.

In contrast, returning a transaction without a valid reason is equally discouraged but isn't as fundamental as the prohibition against unauthorized transactions. Using correct transaction codes is essential for ensuring proper processing of transactions, and communicating with the receiving bank is necessary for operation within the ACH Network, particularly as it relates to clarifying instructions and addressing issues that may arise.