Return Process
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Return Process


Revised March 25, 2011



Return Process

When will an EFT pre-note or live dollar transaction be returned?

 

How often are files returned?

 

Who is responsible for replacing benefits?

 

How will I be notified of a failed pre-note or live dollar transaction?

 

What alerts are generated when a pre-note or live dollar transaction is returned?

 

What are the return reason codes?

 


When will an EFT pre-note or live dollar transaction be returned?

 

·         Pre-note or live dollar transactions can be returned if the receiving financial institution finds an error condition.

 

How often are files returned?

 

·         There are approximately 4 to 10 returns during a month.

 

Who is responsible for replacing benefits?

 

·         The user is responsible for initiating a replacement request when needed.

 

How will I be notified of a failed pre-note or live dollar transaction?

 

·         If a pre-note is returned by the financial institution, the user will receive an informational alert.

 

·         The purpose of the alert is to advise the user of the failure. Although no specific action is required of the user, on a case by case basis, the user may determine that additional action is needed.

 

·         If a live dollar transaction is refused by a financial institution, the user will receive an alert. In some cases, the alert is informational.

 

·         In other cases, the alert advises the user to review the case in order to determine whether or not a replacement of the issuance is required.

 

What alerts are generated when a pre-note or live dollar transaction is returned?

 

·         Alert 052  EFT PRENOTE TRANS FAILED-CLOSED ACCOUNT will generate for pre-note returns.

 

·         Alert 053 EFT TRANS FAILED-CLOSED ACCT-ALT PYMT ISSUED will generate for Live-Dollar Returns.

 

·         Both of these alerts will generate with a second line description of a return reason code.

 

What are the return reason codes?

 

·         Fourteen (14) possible return reason codes have been identified as having the potential to occur with EFT transactions. The 14 return reasons fall into three general groupings:

 

o    Group 1 - System Will Complete Actions to Generate Replacement

 

o    Group 2 - User Action is Needed to Determine if Replacement is Appropriate and Initiate Request.

 

o    Group 3 - Miscellaneous Exception Conditions


Group 1– System Will Complete Actions to Generate Replacement

 

Returned pre-note:

 

o    The user of record receives an alert when an EFT pre-note is returned. See Reason codes for returns - Group 1.

 

o    Letter 039-01 (Reject Pre-Note / Direct Deposit) is sent to the head of household or the payee as appropriate for AU.

 

o    When the issuance method was EBT before the pre-note, the issuance method will remain EBT if the pre-note is returned.

 

o    When the issuance method was WAR before the pre-note, the issuance method will remain WAR if the pre-note is returned.

 

Returned live dollar transaction:

 

o    The user of record receives an alert when a live dollar transaction is returned. See Reason codes for returns - Group 1.

 

o    Letter 039-01 (Reject Pre-Note / Direct Deposit) is sent to the head of household or the payee as appropriate for the AU.

 

o    The original issuance is cancelled and benefit history is updated to reflect the cancellation.

 

o    Division of Child Support (DCS) is notified of the cancellation for TANF AUs.

 

o    Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.

 

o    When the issuance method was EBT before the change to EFT the issuance method will change back to EBT if the live dollar transaction is returned.

 

o    When the issuance method was WAR before the change to EFT, the issuance method will change back to WAR if the live dollar transaction is returned.

 

o    The system will generate an issuance request to replace the original issuance in the same amount, program and month(s) of service as the original issuance.

 

o    The most current payee (head of household or AREP) name and address will be used.

 

o    If the issuance is to be made via EBT, a demographic record will be triggered.

 

Reason codes for Group 1 returns:

 

·         Return Reason R02 - Account Closed: 

 

o    Error will occur when the client or the financial institution has closed a previously active account.

 

·         Return Reason R03 - No Account / Unable to Locate Account: 

 

o    Error will occur when an account number structure is valid and passes check digit validation but the account number does not correspond to the individual identified in the entry or the account number is not designated as an open account.

 

·         Return Reason R04 - Invalid Account Number: 

 

o    Error will occur when an account number has an invalid structure, has failed check digit validation or may contain incorrect number of digits.

 

·         Return Reason R07 - Authorization Revoked by Customer: 

 

o    Error will occur when the payee has revoked the authorization previously provided to the financial institution.

 

·         Return Reason R12 - Branch Sold to Another DFI: 

 

o    Error will occur when a financial institution or a branch of an institution has been sold to another financial institution. Because the institution no longer maintains the account, the payment cannot be accepted. Most times, these kinds of changes are relayed via a Notice of Change.

 

·         Return Reason R16 - Account Frozen: 

 

o    Error will occur when a financial institution refuses to accept additional deposit because the account has been frozen.

 

·         Return Reason R20 - Non-transaction Account: 

 

o    Error will occur either because the account is not a type that can accept EFT deposits or the financial institution is not a type that can accept deposits.

 

·         Return Reason R23 - Credit Entry Refused by Receiver:

 

o    Error will occur when the dollar amount doesn't meet some threshold set by the bank or there is some other reason why bank doesn't want to accept the transaction.


Group 2– User Action is Needed to Determine If Replacement is Appropriate and Initiate Request

 

Returned pre-note:

 

o    The user of record receives an alert when an EFT pre-note is returned.  See Reason codes for returns - Group 2.

 

o    The user needs to investigate the situation and determine if a replacement is appropriate and then initiate request.

 

o    When the issuance method was EBT before the pre-note, the issuance method will remain EBT if the pre-note was returned.

 

o    When the issuance method was WAR before the pre-note, the issuance method will remain WAR if the pre-note is returned.

 

o    User needs to delete deceased AREP or appoint new AREP in order for issuance method to change.

 

Returned live dollar transaction:

 

o    The user of record receives an alert if a live dollar transaction is refused by a financial institution. See Reason codes for returns - Group 2

 

o    No system letter is generated to client. The user may create letter 0039-01 (Reject Pre-Note / Direct Deposit) if appropriate.

 

o    The original issuance is cancelled and benefit history is updated to reflect the cancellation.

 

o    Division of Child Support (DCS) is notified of the cancellation for TANF AUs.

 

o    Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.

 

o    When the issuance method was EBT before the change to EFT the issuance method will change back to EBT if the live dollar transaction is returned.

 

o    When the issuance method was WAR before the change to EFT, the issuance method will change back to WAR if the live dollar transaction is returned.

 

o    The user must request replacement of the issuance on the HMEN screen.

 

o    The replacement will be in the same amount, for the same program and month(s) of service as the original issuance.

 

o    The most current payee (head of household or AREP) name and address will be used.

 

o    If the issuance is to be made via EBT, a demographic record will be triggered as well.

 

Reason codes for Group 2 returns:

 

·         R14 - Representative Payee Deceased or Unable to Continue in that Capacity

 

o    Error will occur when a representative payee has been assigned to receive benefit payments on behalf of the entitled individual and the payee, not the client, has died. The client is still entitled to payment.

 

·         R15 - Beneficiary or Account Holder (Other than Representative Payee)

 

o    Deceased Error will occur when the bank records show the beneficiary is deceased.


Group 3– Miscellaneous Exception Conditions

 

Reason codes for Group 3 returns:

 

·         R01 - Insufficient funds:  

 

o    Error will occur when a debit transaction is refused due to insufficient funds in the client's account. The only time that debit transactions would be used is for reversals. This would happen only in rare situations. Returned Live Dollar Transaction

 

¨        The user must assess the case to determine if an overpayment has occurred or if some other kind of corrective action is needed.

 

¨        No system letter is generated to the client so the user must create a letter to the head of household or the AREP payee as appropriate.

 

·         R06 - Returned per ODFI Request: 

 

o    If a single entry is originated in error, the State may request this entry be returned. An entry in error is one that was sent in the wrong amount, a duplicate payment or a payment that is authorized in error. A bank does not have to honor this request, but if it does, this return code will be used. The return reason doesn't occur with pre-note transactions. Returned Live Dollar Transaction

 

¨        The original issuance is cancelled and benefit history is updated to reflect the cancellation.

 

¨        The issuance method for the AU will change to EBT if there is no AREP or no AREP of type CG, GC, IP, NA, NW, PP, RP, SP, or TN.

 

¨        The issuance method for the AU will change to WAR if there is an AREP of type CG, GC, IP, NA, NW, PP, RP, SP, or TN.

 

¨        Division of Child Support (DCS) is notified of the cancellation for TANF AUs.

 

¨        Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.

 

¨        The user evaluates case to determine whether an overpayment needs to be established or additional action required.

 

¨        The user must send notification to the head of household or AREP payee as appropriate.

 

·         R17 - File Record Edit Criteria:   

 

o    Error will occur when a receiving office edits fields and file can no longer be processed. The field causing the processing error is noted in the addenda record.

 

Returned pre-note: 

 

o    Generate an exception report for investigation by ACES staff. If correction can occur, file will be corrected and resubmitted in next batch run.

 

o    The user is notified of the return via an alert. This notification is for information only. The help desk may be in communication with user if necessary to resolve problem.

 

o    The issuance method for the AU will remain EBT if there is no AREP or AREP code of CG, GC, IP, NA, NW, PP, RP, SP, or TN.

 

o    The issuance method for the AU will remain WAR if there is an AREP of type CG, GC, IP, NA, NW, PP, RP, SP, or TN.

 

Returned live dollar transaction:

 

o    Generate an exception report for investigation by ACES staff.

 

o    The original issuance is cancelled and benefit history is updated to reflect the cancellation.

 

o    Division of Child Support (DCS) is notified of the cancellation for TANF and GH AUs.

 

o    Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.

 

o    No letter is generated by the system to the client so the user must create a letter and send to the head of household or the AREP payee as appropriate.

 

o    In these situations, if a benefit were owed to the HOH or AREP payee, the replacement would likely occur via EBT or WAR as replacement via EFT would delay availability of the benefits by 3 working days.

 

·         R24 - Duplicate Entry: 

 

o    The bank is returning what it believes to be a duplicate (same trace #, dollar, date, etc).

 

o    Returned Pre-note or Live Dollar Transaction:  Generate an exception report for research by ACES staff.

 

Modification Date: March 25, 2011