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When a Name Mismatch Causes a Payment to Fail
In ACH transactions, the focus is usually on numbers—routing numbers, account numbers, and payment amounts. But sometimes, names matter just as much. If the name associated with an account doesn’t match the information in the ACH entry, the receiving bank can reject the transaction.
That’s exactly what happens when you get ACH Return Code R45.
Let’s walk through what R45 – Invalid Individual Name or Company Name means, why it happens, and how you can fix it without slowing down your payment operations.
What Does ACH Return Code R45 Mean?
ACH Return Code R45 stands for:
“Invalid Individual Name or Company Name.”
Here’s the official NACHA definition:
R45 – Invalid Individual Name or Company Name: The name provided in the ACH entry does not match the name on file at the Receiving Depository Financial Institution (RDFI), and the transaction cannot be processed.
In simple terms: the person or business name tied to the account didn’t match what the bank expected, so the payment was rejected.
Why Would an R45 Return Happen?
There are a few common reasons you might encounter an R45 return:
Spelling errors or typos in the name field
Use of nicknames instead of legal names (e.g., “Bob” instead of “Robert”)
Mismatch between the individual and the business name on a business account
Changes to the name on the account (like after a marriage, merger, or rebranding)
Wrong name format (e.g., missing middle initials that the bank requires)
Entering a company name when an individual name is needed, or vice versa
The receiving bank expects the name in the ACH file to match their records closely enough to approve the transaction.
How to Handle ACH Return Code R44
Here’s how to resolve an R44 error quickly and correctly:
1. Review the Name Submitted
Look at the name listed in your ACH file. Compare it to the name on your account holder’s file to check for errors, typos, or format issues.
2. Confirm With the Customer or Recipient
Reach out to the customer or company and verify the exact name on their bank account. For businesses, ask for the full legal company name registered with their bank.
3. Update Your Records
Correct the name in your system to match the bank’s record exactly. Pay close attention to spelling, punctuation, and use of abbreviations or suffixes (like “Inc.” or “LLC”).
4. Resubmit the Payment
Once the name has been updated and verified, you can resubmit the ACH entry.
How to Prevent R45 Errors in the Future
Here are a few best practices to help prevent name-related returns:
Collect official account documentation (such as a voided check or bank letter) during onboarding
Ask for the “legal name on account” when gathering customer or company information
Use ACH systems that allow for name verification during setup
Be careful with data entry, especially for customers who commonly use nicknames or abbreviations
Regularly update customer information if you’re notified of a name change or business reorganization
Clean and verified data at the start means fewer payment issues later.
Get ACH Processing With Durango
ACH Return Code R45—“Invalid Individual Name or Company Name”—means the name on your ACH transaction didn’t match the bank’s records closely enough to allow the payment. While it’s often a simple fix, it’s important to take these returns seriously to maintain smooth transaction processing.
At Durango Merchant Services, we help businesses fine-tune their ACH payment systems so errors like R45 are rare—and easy to resolve when they do occur. Whether you’re working with individuals, companies, or a mix of both, we can help ensure your transactions match up and move forward without delay.
