Overview
When an end customer disputes an ACH debit, their bank may return the transfer and pull funds back from your funding account. ACH disputes work differently from card chargebacks: once the consumer’s bank accepts the dispute and returns the funds, you generally can’t contest or reverse that decision through the network. ACH debit transactions can typically be disputed for up to 60 calendar days after the settlement date.
When Plaid needs more information about a disputed transaction, you’ll see a Tasks header in your Transfer Dashboard asking you to provide Proof of Authorization (POA) for one or more transfers. This article explains what that means and what to do next.
Step 1: Locate the dispute in the Transfer Dashboard
- Sign in to the Plaid Dashboard and go to Transfer.
- Look for a Tasks header indicating that Proof of Authorization is required for disputed transactions.
- From the Tasks header, open the affected task to see:
* The transfer ID(s)
* Amount, direction (debit/credit), and status (for example,
returned; see the Transfer status lifecycle for the full set) * Any return code or additional details provided by the bank
You can also search and click into the individual transfer from the Transfer activity table to see its full event history, status, and related refunds or sweeps.
Step 2: Gather proof of authorization (POA)
For ACH debits, Nacha requires that you collect and retain a record showing that the end customer authorized the payment. You must keep this record for at least two years and be able to provide it if a dispute occurs.
Examples of acceptable POA include (non-exhaustive):
- A signed or electronically signed ACH authorization form
- Screenshots or PDFs of your in-app checkout/authorization screen showing:
- The amount (or how the amount is determined)
- The customer’s bank account details or masked account
- Clear language authorizing you to debit their account
- A timestamped confirmation page or email showing the customer agreed to the debit
- Logs from your system (for example, IP address, timestamp, user ID) tied to the authorization event
If you use Plaid Transfer UI to collect authorizations, Plaid can collect and store POA on your behalf in alignment with Nacha guidance on ACH authorization requirements.
Step 3: Submit POA back to Plaid
- Return to the Tasks header in the Transfer Dashboard.
- Open the relevant task and follow the on-screen instructions to: * Upload or attach your Proof of Authorization documentation, or * Provide any requested context about the transaction (for example, whether you have already refunded the customer through another method).
- If you don’t see an upload option in the dashboard, respond to the dispute notification channel specified by Plaid (for example, your existing Plaid support channel) and include: * The transfer_id * The return code, if available * Your POA documentation as an attachment
Plaid will review your submission in coordination with our bank partners and the ACH network rules.
Step 4: Understand possible outcomes
Because ACH is a bank-to-bank system, the consumer’s bank ultimately decides whether to return or keep the funds. Key points:
- If the consumer’s bank accepts the dispute and returns the funds, those funds are automatically pulled back from your funding account and the transfer will have a status of
returned. - Unlike card chargebacks, ACH disputes generally cannot be “won back” once the bank processes the return.
- A clear, recognizable description on the customer’s bank statement can help prevent “unrecognized charge” disputes in the first place (for example, including your brand name and the purpose of the payment).
In some cases, after you provide strong Proof of Authorization and context, the dispute may be resolved in your favor (for example, if the bank determines the payment was properly authorized). However, you should generally plan for ACH disputes as final returns from the network and handle any customer remediation (such as re-billing or account adjustments) directly with your end user.
Step 5: Best practices to reduce future disputes
To reduce the likelihood and impact of future disputes:
- Collect strong authorizations Use clear, plain language that explains what will be debited, when, and under what conditions, and store this record for at least two years.
- Use Transfer UI where possible Plaid’s Transfer UI can help you capture ACH authorizations in a Nacha-aligned way, reducing operational burden and simplifying POA collection.
- Make bank statement descriptors recognizable Use concise descriptions that help customers recognize the payment and reduce “unrecognized charge” disputes.
- Monitor return and dispute patterns Use the Transfer Dashboard’s metrics and activity views to track your overall return and dispute rates and investigate any unusual patterns.
When to contact Plaid Support
Contact Plaid Support (or your Plaid account team) if:
- You see a dispute/POA Tasks header but can’t identify which transfers are affected.
- You’re unsure whether a particular authorization record is sufficient as POA.
- You believe a dispute was opened in error (for example, duplicate notifications).
Include the transfer_id, any relevant return codes, and a short summary of what you’re seeing in the Transfer Dashboard so we can help you more quickly.