Validations

Overview

Lead applies various validation checks on all ACH transactions processed through our systems.

In the event of a validation failure:

API-based ACH: the individual transaction may be queued for manual review by a Lead processor in cases that require more research or could be immediately rejected at submission time
File-based ACH: if an individual entry in a Nacha file fails validation, Lead will reject the entire file and report via Slack about any individual entry validation exceptions

For ACH API integrations, we may inform you synchronously for validation failures that do not need a manual review with a real time HTTP 422 error response. For other cases where a manual review or additional processing is required, we will inform you asynchronously via ach.rejected webhook. Please see the table below to determine which validations are synchronous or asynchronous. While it is not always possible to prevent all validation failures, following these best practices can reduce the likelihood of exceptions:

Validation	Best Practice	Is Rejection Synchronous via API?
account_number_not_active	Verify that the account number used for an ACH transaction is in active status before initiating a transfer.	Y
aggregate_limit_exceeded	Periodically review ACH transaction volume and ensure that daily/monthly aggregate limits set with Lead are sufficient for your business.	N
client_customer_not_present	Ensure all account numbers have a valid entity_id	Y
disallowed_counterparty	Periodically review disallowed counterparty lists to ensure accuracy	Y
disallowed_sec_code	Ensure that you are utilizing the proper SEC codes approved by Lead for your use cases	Y
invalid_format	This indicates a failure to format inputs correctly in an API, or a failure to properly format a Nacha spec file. Ensure you follow all guidance.	Y
non_sufficient_funds	Monitor and manage the balance in the originating account to prevent NSF (Non-Sufficient Funds) scenarios.	N
ofac_rejection	Institute proper screening procedures to help prevent sanctions list matches.	N
per_transaction_limit_exceeded	Periodically review ACH transaction volume and ensure that per transaction limits set with Lead are sufficient for your business.	Y
previously_corrected	React promptly to `ach.corrected` webhooks to prevent subsequent transactions from being flagged.	N
related_prenote_exception	If you utilize prenotifications, ensure that you do not submit any live transactions until after three banking days from the date of the prenote.	N
return_untimely	Submit returns as soon as possible to ensure they are processed within the allowed timeframe.	Y
reversal_rejection	When in doubt, reach out to Lead payment processors to ensure you are properly setting reversal codes for your use case.	N
unexpected_return_code	Ensure you are adhering to Nacha guidance on proper use of return codes for your use case.	N
unexpected_routing_number	Ensure that the recipient’s routing number is accurate before submitting an ACH transaction.	Y

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