Bank Account Verification Through ValidiFI

Introduction

NACHA has supplemented their fraud detection standards by requiring that lenders validate their borrowers' bank accounts. LoanPro is integrated with ValidiFI, whose services can help you validate your borrowers' bank accounts. These tools enable you to detect and prevent fraud, and maintain compliance with NACHA's due-diligence rules or any laws that your company is subject to. NACHA recognizes them as a preferred partner for account validation, meaning they can be trusted to provide top-tier service in this area.

ValidiFI's integration with LoanPro makes it simple and easy to validate any payment profiles you've entered on Secure Payments.

This article covers verification for checking and savings accounts, but we have a parallel service for bank cards — see Bank Card Attribute Lookup.

What are their Service Levels?

Through Secure Payments, you have access to three tiers of ValidiFI account validation: Basic, Standard, and Enhanced.

  • Basic: Basic searches cost $0.34 per validation. It authenticates the routing number structure and status, and ensures that the account number conforms to the routing number. It also identifies the most basic errors associated with data entry and outdated information.
  • Standard: Standard searches cost $0.66 per validation. They increase the screening and validation on routing and account numbers with ValidiFI’s network of payment, banking, and merchant contributors. This helps eliminate common errors and confirm the status of routing and bank account numbers.
  • Enhanced: Enhanced searches cost $0.99 per validation. The enhanced validation verifies the routing and account number against an expanded list of sources. This is ideal for ensuring maximum coverage and identifying the account's status. It also identifies accounts associated with administrative returns.

Here's a breakdown of the different analytical tools applied with each tier of validation:

Analytics Tool

Basic

Standard

Enhanced

Routing Number Validation

X

X

X

Account Number Structure

X

X

X

ValidiFI Bank Risk Data

X

X

X

Third Party Data

X

X

Merchant Data

X

X

Banking Data

X

X

ValidiFI Insights Data

X

Configuration

Within Secure Payments, click 'Actions' on the navigation pane on the left of the screen.

This page lists the different actions available in Secure Payments and lets you toggle each of them on or off. ValidiFI's services are listed as 'Bank Account Attribute Lookup', found near the bottom.

The drop-down menu lists the available service tiers.

Validating an Account

Now that you've turned on bank account controls, the system will automatically validate any payment profiles you add. Once you've created a payment profile, just navigate back to it in the Secure Payments UI and you'll see all the information ValidiFI found on the account. Add or edit a payment profile, then go to Customers > select a specific customer > Payment Profiles.

The Validation Response is a result, shorthand for what ValidiFI discovered. If there is an issue, it will be explained in the Message. This basic validation sample gives a result code of AVC8, and the message explains that while the routing number is valid, that bank has never used account numbers like the one this borrower gave. This would indicate either a simple typo or perhaps an attempt at fraud; in either case, the payment profile is likely unusable.

Result Codes and Controls

When an account is validated, the system will give you a result code explaining the results. You can configure your settings so that Secure Payments will not attempt to process payments from profiles with the result codes you specify. In the navigation pane at the left, select Bank Account Control. Toggling each result will determine whether the system will attempt to process payments with those codes. If a result code is turned on, the system will accept payment profiles that return it.

This table explains what each indicates:

Result Code

Result

Message

AVC0

Unexpected Service Disruption

An unexpected service disruption with one or more data sources occurred.

AVC1

Invalid Routing Number Structure

The Routing Number structure does not conform to the ABA standard.

AVC2

Suspected Bad Routing Number

The Routing Number structure conforms to the ABA standard but has a history of returns for an invalid routing number

AVC3

Routing Number Not Found

The Routing Number is not found within the ABA list of Routing Numbers.

AVC4

Routing Number is Not ACH Capable

The Routing Number is not Active, not ACH capable, or is of the wrong type according to the ABA list of Routing Numbers.

AVC5

Suspected Bad Account Pattern

The Routing Number is valid, active, and is ACH capable. The Bank Account Number is suspected to be invalid, or has a length or pattern with a history of returns for invalid account.

AVC6

Valid Account with History of Recent Returns, Unpaid, or Stop Payments

The Routing Number is valid, active, and is ACH capable. The Bank Account Number is valid and there is recent histrory of returns/unpaid or stop payments seen in ValidiFI's database.

AVC7

Valid Routing Number with Limited Account Pattern and No History of Recent Transactions

The Routing Number is valid, active, and is ACH capable. There is limited history of the Bank Account pattern and no history of recent transaction seen in ValidiFI's database for the provided Bank Account Number.The Routing Number is valid, active, and is ACH capable. There is limited history of the Bank Account pattern and no history of recent transaction seen in ValidiFI's database for the provided Bank Account Number.

AVC8

Valid Routing Number with No History of Account Pattern

The Routing Number is valid, active, and is ACH capable. There is no history of the Bank Account pattern seen in ValidiFI's database for the provided Bank Account Number.

AVC9

Valid Routing Number and Account Pattern

The Routing Number is valid, active, and is ACH capable. The Bank Account pattern is valid.

AVC10

Valid Routing and Bank Account with Recent Transaction History

The Routing Number is valid, active, and is ACH capable. The Bank Account Number is valid and there is recent history of Bank Transaction seen in ValidiFI's database.

AVC11

Valid Routing and Bank Account with Verified Good Transaction History

The Routing Number is valid, active, and is ACH capable. The Bank Account Number is valid, has history of good transactions, and there is no recent history of returns seen in ValidiFI's database.

NV

99

Not Validated

The Basic validation will return AVC0 - AVC9, but because it doesn't check the account's transaction history, it won't ever return AVC10 or AVC11. The Standard and Enhanced validations can both return any of these codes, and the difference between the two searches is more a question of accuracy, with the Enhanced validation checking against an expanded list of sources.


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