An ACH Notification of Change, or NOC, is a message the receiving bank sends back through the ACH network telling whoever originated a payment that some piece of the account data was wrong and needs to be fixed. The money still gets through. The bank was able to identify the right account despite the error, so it posted the deposit and used the NOC to flag the correction for next time. If you originated the payment, you have six banking days to update your records before the next entry goes out.
How an NOC Moves Through the System
Three parties are involved. The Receiving Depository Financial Institution (RDFI), the payee’s bank, spots the bad data first. Because it can still match the payment to the right account holder, it credits the funds and generates a non-monetary ACH entry with the Standard Entry Class code COR, which is the formal name for an NOC in the NACHA system.1Treasury Financial Experience. A Guide to Federal Government ACH Payments – Notification of Change The COR entry flows back to the Originating Depository Financial Institution (ODFI), the sender’s bank, which passes it to the business or agency that sent the original payment.
An NOC is only appropriate when the bank can successfully post the transaction despite the error. If the data is too garbled to identify the recipient, or the account is closed, the bank returns the payment instead.1Treasury Financial Experience. A Guide to Federal Government ACH Payments – Notification of Change
Bank mergers are the single most common trigger, because routing numbers get reassigned and account numbers often migrate to a new format. Other triggers include a customer changing their name on an account, a bank reorganizing its internal numbering, or a data-entry mistake at initial setup — a customer providing a check number instead of the account number, for example.
What the Change Codes Mean
Every NOC carries a reason code that tells the originator exactly which field to fix. NACHA defines these codes in its Operating Rules, and payroll and accounts-payable software use them to route corrections automatically. The ones you’ll see most often:
- C01, incorrect account number.
- C02, incorrect routing number. Very common after bank mergers.
- C03, incorrect routing and account number.
- C04, incorrect account name. Usually a name change on the account.
- C05, incorrect transaction code. A checking deposit was coded as savings, or vice versa.
- C06, incorrect account number and transaction code.
- C07, incorrect routing number, account number, and transaction code. The most comprehensive single correction.
Less frequent codes cover the business-side identifiers: C09 for an incorrect individual identification number, C10 for an incorrect company name, C11 for an incorrect company identification, and C12 for both company name and ID. International ACH Transactions carry their own NOC considerations, with additional fields for currency and country codes that domestic entries don’t use.2Federal Reserve Financial Services. FedACH Services Notification of Change Exception Fax Form for IAT Items Instructions
Each NOC message also contains the original trace number, which links back to the specific payment that triggered the notice, and the corrected data itself, formatted according to strict position rules so accounting software can parse it.
The Six-Banking-Day Deadline
NACHA’s Operating Rules give originators six banking days from receipt of the NOC to update their records, or before the next live payment goes out, whichever comes first. Weekends and federal holidays don’t count, so the actual calendar window usually runs eight to ten days.
There’s one meaningful exception. For a one-time payment, NACHA gives originators discretion on whether to act on the NOC at all, regardless of the SEC code used.3Nacha. Minor Rules Topics If you sent a single vendor payment and got a C02 back, there’s no future entry that would carry the bad data, so you’re not obligated to update anything. For recurring payments — payroll direct deposits, subscription billing, regular vendor disbursements — the six-day rule is mandatory.
Applying the Correction Without Creating a Bigger Problem
Most modern payroll and accounts-payable platforms flag an incoming NOC and present the corrected data for review before applying it. Before committing the change, cross-reference the trace number against your records to confirm you’re updating the right payee. Applying one employee’s corrected account number to a different employee’s profile creates a much bigger problem than the original NOC was trying to fix. Keep an audit trail of what changed and why, in case a payment dispute surfaces later.
When To Refuse an NOC
NOCs aren’t infallible. If the correction doesn’t match your records or looks like an error on the bank’s side, you can refuse it using codes in the C61 through C69 range:
- C61, the NOC was misrouted to the wrong originator.
- C62, the trace number doesn’t match any transaction you originated.
- C63, the company identification number in the NOC is incorrect.
- C64, the individual identification number is incorrect.
- C65, the corrected data field is improperly formatted.
- C66, incorrect discretionary data.
- C67, the routing number in the NOC doesn’t match the original entry.
- C68, the account number doesn’t match the original entry.
- C69, the transaction code is incorrect.
Refusing an NOC isn’t casual. If your records genuinely conflict with the correction, a refused NOC tells the receiving bank to re-examine the situation. Ignoring a legitimate NOC because you’d rather not deal with it is a different matter, and it will eventually produce returned payments.
If a Payroll Provider or Payment Processor Handles Your ACH
Many businesses don’t originate ACH directly. They use payroll providers, payment processors, or other third-party senders that batch transactions on their behalf. When an NOC comes back, the third-party sender has to relay it to the originator quickly enough that the six-banking-day deadline can still be met.
NACHA’s rules place the correction obligation on whichever party controls the receiver’s account data. If the payroll provider maintains the employee bank account records, the provider makes the fix. If the business keeps those records and the provider just transmits files, the business makes the fix. The clock starts when the responsible party receives the information, and a third-party sender cannot let the NOC sit in a queue while the deadline passes.
What Happens If You Ignore It
The first consequence is practical. During mergers and system transitions, banks honor old account identifiers for a limited window. Once that window closes, payments with uncorrected data start coming back as returns, each typically carrying a fee from your bank. Those fees add up fast at volume.
NACHA also operates a formal enforcement mechanism called the National System of Fines. Through a structured process of warnings and escalating penalties, it addresses repeated rules violations, including persistent failure to act on NOCs.4Nacha. Report of Alleged Violation of the ACH Rules The system is designed to escalate until the behavior is corrected. For a business running regular payroll, repeated NOC failures also mean employees or vendors not getting paid on time.
Your ODFI monitors your return and NOC rates too. A consistently high rate signals poor data hygiene, and banks have terminated originator agreements over chronic compliance issues. Losing ACH origination privileges means finding a new banking partner willing to take on the risk, which is not a quick process.
If You’re the One Receiving the Payment
If you’re an employee or vendor on the receiving end rather than the sending end, an NOC almost never requires action on your part. Your bank handles it in the background and your deposit still lands. The scenario where you might notice is after switching banks or closing an account: if a payment hits the old institution and it can still route the funds to you, it will send an NOC instead of bouncing the deposit.
The one thing worth doing on your side is verifying, when you first set up direct deposit, that the account and routing numbers on file match what your bank shows. If you transposed digits and the bank happened to figure out the right account anyway, everything looks fine — until something else changes about your banking setup and the original error resurfaces in a form the bank can no longer resolve on its own.