Accredited ACH Professional (AAP) Practice Exam

What is the fee charged by an Originator for a debit entry returned due to NSF or UCF called?

1. Service Fee

2. Return Fee

3. Processing Fee

4. Transaction Fee

The correct answer is: Return Fee

The fee charged by an Originator for a debit entry returned due to Non-Sufficient Funds (NSF) or Uncollected Funds (UCF) is referred to as a Return Fee. This fee typically compensates the Originator for the inconvenience and potential financial implications of the failed transaction. When a debit entry is returned, it interrupts the flow of funds that the Originator expected to receive, hence the need for a designated fee to address this situation. While other terms like Service Fee, Processing Fee, or Transaction Fee may often be used in different contexts, they do not specifically denote the charges associated with returned debit entries due to insufficient or uncollected funds. A Service Fee generally covers regular account maintenance or other ongoing services, a Processing Fee might be associated with handling transactions or administrative tasks unrelated specifically to the return of a debit entry, and a Transaction Fee usually refers to a fee for processing a single transaction, rather than one that is returned.