WASHINGTON–Nacha is proposing changes to its operating rules that could give credit unions and other financial institutions additional time to investigate potentially fraudulent claims involving ACH debits before refunding customers, as part of a broader initiative targeting first-party fraud.
The organization, which governs the Automated Clearing House (ACH) Network, has issued a Request for Information and Request for Comment seeking industry feedback on the growing problem of consumers falsely claiming that authorized transactions were unauthorized.
Comments are due Dec. 11, 2026, and the proposed rule change would take effect June 18, 2027, if approved, according to Nacha.
What Is First-Party Fraud?
Unlike traditional fraud involving an outside criminal, first-party fraud occurs when an account holder knowingly misrepresents a legitimate transaction as unauthorized.
Nacha identified two common forms of the fraud:
- Account-opening fraud: A consumer opens an account at another financial institution, brokerage, cryptocurrency exchange or digital wallet, funds it through an ACH debit from an existing account, withdraws or transfers the money, and then falsely disputes the original debit.
- False payment claims: A consumer authorizes an ACH debit for a loan payment, utility bill, purchase or other obligation, then falsely claims the transaction was unauthorized to obtain a refund.
In both cases, the financial institution receiving the debit dispute may return the transaction using ACH Return Reason Code R10, potentially leaving the originating institution or business with a financial loss.
Nacha said financial institutions have reported increasing instances of these schemes, although the organization is seeking additional data to determine their overall frequency and financial impact
Proposed Change to Refund Requirements
The specific rule proposal addresses the obligation of a Receiving Depository Financial Institution (RDFI), such as a credit union, to promptly recredit a consumer’s account after receiving a Written Statement of Unauthorized Debit.
According to Nacha, some institutions interpret the existing requirement to mean they must refund the consumer immediately or on the same day the claim is received, potentially limiting their opportunity to investigate whether the transaction was actually authorized.
The proposed amendment would clarify that an institution is not required to recredit a consumer before its obligation to provide provisional credit arises under federal Regulation E.
For nonconsumer accounts, the proposal would allow a comparable period reasonably necessary to investigate the claim.
Deadlines Remain Deadlines
Nacha emphasized that the change would not alter existing deadlines for returning ACH transactions or the requirement to recredit an account before returning the entry.
The organization said the clarification could allow institutions to identify fraudulent claims before returning transactions, potentially preventing financial losses.
No operational changes would be mandatory under the proposal.
Additional Fraud Prevention Measures Under Consideration
Beyond the specific rule amendment, Nacha is requesting industry feedback on several potential approaches to identifying and reducing first-party fraud.
Among the possibilities being explored are:
- Standardized transaction descriptions that help financial institutions determine the purpose of ACH debits.
- Additional transaction data indicating whether a payment was authorized or an account was previously verified.
- Better mechanisms for originating institutions to provide proof that disputed transactions were authorized.
- Possible new procedures, including arbitration, for challenging unauthorized returns.
- Enhanced monitoring of accounts generating unusually high numbers of unauthorized transaction claims.
Nacha is also examining whether some of these changes could improve fraud prevention for emerging Pay by Bank transactions.
The organization said receiving institutions may be particularly well-positioned to identify suspicious activity because they maintain the accounts from which disputed payments originate.
Credit Unions Encouraged to Review Dispute Practices
In earlier guidance, Nacha recommended that receiving institutions monitor their unauthorized ACH return rates and investigate unusual patterns.
The organization said the ACH Network’s average unauthorized debit return rate is approximately 0.05%. An institution with a significantly higher rate, such as 0.1%, should examine whether its accounts or dispute procedures are being targeted by fraudsters.
Nacha has also encouraged institutions to examine transaction histories, repeated unauthorized claims, account verification records and other available information when reviewing disputes.
However, Nacha cautioned that fraud prevention efforts must not discourage consumers from filing legitimate claims or interfere with their rights under Regulation E.
The organization is asking ACH participants to provide information about the prevalence of first-party fraud, financial losses, potential responsibilities of receiving institutions and possible improvements to dispute resolution.
The proposed rule and accompanying information request are part of Nacha’s broader effort to strengthen ACH fraud controls while preserving consumer protections.
Additional Information
The complete proposal, supporting materials and instructions for submitting comments are available on Nacha’s website.
