High-risk ACH processing refers to pulling funds (ACH debits) from a consumer or business bank account where the likelihood of disputes is higher. Disputes typically fall into two buckets:
“Not Authorized” or “Authorization Revoked/Not Fulfilled.” Under NACHA rules, consumers and businesses can challenge ACH debits and, if the dispute is valid, recover their money.
How ACH disputes and returns work
When an account holder contacts their bank and initiates a return (often called a “chargeback” in card terms), funds are credited back to them.
· R10 – Customer Advises Not Authorized: Common when bank details were stolen or the customer claims no consent. Consumers generally have up to 60 days to dispute; businesses often have a much shorter window (e.g., 48 hours).
· R07 – Authorization Revoked: Example: A customer pays $70 for a dental plan, finds it unusable, can’t get a refund from the merchant, and asks their bank to reverse the debit. The merchant’s account is debited for $70.
Because ACH returns can reverse funding, the third-party ACH processor bears material risk. In this guide, that processor is Liftoff ACH Solutions (part of Liftoff Platform). If a merchant’s account can’t be debited after a return, Liftoff ACH Solutions may be left holding the loss. That’s why underwriting for high-risk ACH feels more rigorous than for lower-risk cases: the goal is simple—don’t lose money—while still enabling legitimate businesses to collect payments.
Why ACH was built—and where “high risk” came from
ACH was designed for predictable, recurring collections—insurance premiums, mortgages, utilities—categories with very low dispute rates (often well under 1%). As third-party processors expanded access, many more industries adopted ACH. Most are legitimate; some were not. Processors like Liftoff ACH Solutions therefore apply risk controls to prevent losses and maintain banking relationships.
“Friendly fraud” example
A payday lender debits $99 for a scheduled payment. The consumer decides they need that money for groceries and disputes the debit even though they signed an authorization. In ACH, disputing and winning can be easier than in cards, and the merchant can lose the funds. Liftoff ACH Solutions mitigates this with stricter authorizations, bank-account validation, velocity limits, and smart retry rules.
Who actually carries the risk?
Short answer: the processor—here, Liftoff ACH Solutions.
If a fraudulent merchant gets approved for $50,000 in monthly ACH, pushes through stolen bank numbers, and is funded before the fraud surfaces, the processor may never recover the funds once the fraudster disappears. Beyond direct losses, the bank partner could terminate the relationship, and regulators may scrutinize controls. Robust KYC/KYB, compliance, and monitoring are non-negotiable.
NACHA thresholds and staying compliant
NACHA monitors return categories (especially unauthorized). Processors expect merchants to keep unauthorized returns well under 1% (and to maintain low overall return rates). Liftoff ACH Solutions helps merchants stay within thresholds using:
· NACHA-compliant authorizations (clear, specific, stored securely)
· Bank account validation (routing/account checks, account type screening)
· Balance/NSF checks and smart retries
· Velocity and amount caps, delayed funding, and reserves where appropriate
· Ongoing return-code analytics (R01, R07, R10, etc.) with coaching to reduce repeats
Getting approved with Liftoff ACH Solutions (what to expect)
High-risk underwriting is deeper by design. Be prepared to provide:
· Business formation docs, EIN, owner IDs (KYC/KYB)
· Processing history (statements, return rates, average ticket)
· Refund/fulfillment policies, customer service SLAs
· Marketing materials/website for truthful claims and clear pricing
Startups can still be considered; principals may undergo enhanced vetting, and Liftoff ACH Solutions may set initial caps, rolling reserves, or longer funding until a positive track record is established.
High-risk verticals Liftoff ACH Solutions can evaluate (case-by-case)
Note: Bank rules vary. Some categories may be restricted or prohibited. Approval depends on complete due diligence and acceptable risk metrics.
· Annual memberships
· Adult websites/novelties
· Alcohol sales via internet and phone
· Animals by mail
· Auctions
· Bad credit
· Bail bonds (card-not-present)
· Business opportunity
· Cigars/cigarettes
· Collection agencies
· Continuity offers (free trial/negative option)
· Credit repair/credit counseling
· Currency exchange (FOREX, crypto, quasi-cash)
· Daily deal sites
· Dating sites/services
· Debt reduction/consolidation
· Discount medical cards/memberships
· Donations
· eBay merchants
· Ebooks/digital downloads
· Electronic cigarettes and accessories
· Escort agencies
· Extended warranties
· File sharing/cloud hosting
· Financial services
· Firearms/weapons
· Furniture/home décor
· Gift certificates/gift cards
· Hotel reservations
· Investing advice/stock tips/software
· Large ticket sizes
· Legal services
· Magazine subscriptions
· Medical services
· Multi-level marketing (MLM)
· Non-accredited degrees
· Nutraceuticals/dietary supplements
· Pharmacy
· Penny auctions
· Precious metals and jewelry
· Prepaid phone cards
· Property rentals & vacation rentals
· Psychics
· Remote PC tech support
· Search-engine marketing (SEO/PPC)
· Sports picks/handicapping
· Stun guns/personal defense
· Tax debt reduction
· Ticketing (advance booking)
· Timeshare sales/advertising
· TMF merchants
· Travel services
· Video streaming
· Warranty services
· Web hosting
EFT/ACH vs. Wires—quick recap
· ACH/EFT: Lower cost, batch-processed, great for recurring AP/AR.
· Wire: Higher cost, rapid finality, ideal for high-value, time-critical payments.
Liftoff ACH Solutions can pair ACH with wires to match speed, cost, and risk to the use case.
Key return codes you’ll see (and what to do)
· R01 – Insufficient Funds: retry on known paydays, offer backup methods
· R07 – Authorization Revoked: collect a new authorization or cease debits
· R10 – Not Authorized: investigate, gather documentation, switch to safer method
· Plus, routing/account errors (R03, R04, R13), stop payments (R08), frozen/non-transaction accounts (R16/R20)
Best practices from Liftoff ACH Solutions
· Clear disclosures and NACHA-compliant mandates (date, amount or range, frequency)
· Pre-debit notifications (email/SMS) to reduce “surprise” disputes
· Tiered risk controls (caps, reserves, delayed funding) matched to performance
· Analytics & coaching to push unauthorized returns down over time
· Responsive support to resolve returns quickly and protect banking relationships
Ready to apply?
Contact Liftoff ACH Solutions to discuss your use case, risk profile, and go-live plan. With the right controls, high-risk ACH can be predictable, compliant, and scalable—without sacrificing customer experience or cash flow.