“You made a mistake this time around. But don’t worry, I know it was not intentional. Therefore, this time I got your back. Here’s an ACH Notification of Change (NOC). Be more careful the next time around.”
This is basically what banks tell you when they send you an ACH Notification of Change (NOC) Code on a transaction.
Super neat. Right?
Well, banks are wise that way. With digital acceleration in the financial services space, banks are getting smarter every day. They are also becoming more customer-friendly and convenient to offer the best possible services.
Let’s understand what ACH Notification of Change (NOC) Codes mean with an example.
What do ACH NOC Codes mean?
Let’s say you are an employer and you need to pay your employees their salary regularly. You probably need to pay hundreds of employees who have accounts with hundreds of different banks. Now, while paying these employees through ACH payment solutions, your bank notices that the bank details for a few of these employees have changed.
Maybe your employees’ banks underwent a new merger and changed the account numbers or routing numbers. Perhaps the banks rebranded and changed their name.
Under such circumstances, in most cases, the Fed (Federal Reserve Bank) is smart enough to recognize this change. After identifying it, the Fed automatically processes the payment to the correct account and sends you an ACH notification code. This code signifies that the Fed has processed the change correctly this time around, but for all future payments, it would be wise that you, as an employer, update the bank records of the concerned employees.
By identifying and understanding the different codes, you can know precisely what information you need to update for the Fed to process the payment correctly the next time around.
(The same goes true for payments between vendors and their customers)
A Complete List of NOC Codes
Now that we understand the importance and meaning of NOC codes, let’s quickly define the different types of codes.
C01 – Incorrect bank account number
This code signifies that you need to modify the account number of the concerned employee/customer. The modifications can include:
- Changes to the account information (in case of data entry errors while entering the account number)
- Changes to the account number itself (in case the bank account number has changed due to a merger or modification)
- Changes to the account numbering system (in case the employee’s bank branch is changed/closed)
C02 – Incorrect transit/routing number
This code requires you to modify the transit/routing number associated with the employee’s account. Such a code can pop up if your employee’s bank is undergoing a merger or recommends a different preferred routing number for its account holder.
C03 – Incorrect transit/routing number and bank account number
This code is a combination of C01 and C02, usually a merger between two banks. You need to modify both the account number and the routing number for the Fed to process the payment correctly the next time.
C04 – Bank account name change
If the name of your employee’s bank changes (usually due to a rebranding effort by the bank), you will see this code on your transaction.
C05 – Incorrect payment code
This code suggests that you need to update the bank account type for your employee in your records. The change usually means changing the records for the account type from savings to checking, or vice versa.
C06 – Incorrect bank account number and transit code
This change code is the combination of C01 and C05 NOC codes. As an employer, you must change:
- The account number for your employee (in case of a bank merger)
- The account type from savings to checking, or vice versa
Note: In several cases, you can be asked to update your records not due to a change at the bank but due to a data entry error on your front. Make sure that you double-check these details while entering them into the system for the first time.
C07 – Incorrect transit/routing number, bank account number, and payment code
This ACH technology NOC code suggests a change of 3 crucial details. It is essentially a combination of C01, C02, and C05 codes. Therefore, while updating the employee records, you must change their:
- Account numbers
- Transit/routing codes
- Payment code
C09 – Incorrect individual ID number
The individual ID number is the number your bank uses (from which you are making payments to your employees) to identify the specific employee you are paying.
This ACH Notification of Change (NOC) code suggests that the unique ID number associated with the concerned employee is invalid and needs to be updated in your records.
For a quick summary of all COR (Change of Return Codes), check out the free PDF on this website.
In addition to employees, organizations often deal with other vendors/companies too. They can use the ACH solutions to automate and schedule payments to these customers’ bank accounts. The following three NOC codes are valid for the relationship between the “vendor” and the “customer” organizations.
C10 – Incorrect company name
This code suggests that the name of the company that you are dealing with has changed. So, to process the upcoming payments without a glitch, you must update your records to reflect the correct name.
C11 – Incorrect company identification
If your customer’s company ID changes, the C11 NOC code will pop up on your transaction.
C12 – Incorrect company name and company ID
This code is a combination of C10 and C11. Therefore, to streamline the upcoming transactions, you need to get your customer’s new details for the company ID and company name and update them on your records.
Important Note: Usually, banks give their customers up to 6 days to update their records after initially sending the NOC codes. You should update these records as soon as possible so that you do not face any additional costs, processing fees, or customer service issues. Also, you should not try to reprocess the transaction on which you received the NOC code because the bank takes care of it for the first time around.
These codes sum up the most common codes you will encounter while trying to process payments through ACH payment solutions.
Learn more about other types of return codes in this comprehensive booklet by NACHA. Moreover, you can access this quick cheat sheet to learn more about NACHA’s operating rules and return codes.
Date originally published: January 18, 2022
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