When is an ACH transaction typically considered unauthorized?

An ACH transaction is typically considered unauthorized when the account holder has not provided consent. This aligns with the foundational principles of the Automated Clearing House (ACH) network, which is designed to facilitate secure electronic payments and transactions among financial institutions. Consent from the account holder is a critical component in the initiation of these transactions; without it, the transaction lacks the necessary approval and authorization.

This policy is in place to protect consumers from fraudulent activity and to maintain the integrity of the payment system. If an ACH transaction is processed without the account holder's explicit agreement, it can be classified as unauthorized, warranting potential reversal and investigation. Ensuring that proper consent and authorization are obtained prior to processing transactions helps safeguard against disputes and potential financial losses for consumers.

In contrast, the other options relate to conditions that do not inherently address the fundamental necessity of consent from the account holder. Transactions completed without proper verification or those initiated by the account holder may still be authorized if consent is given, and approval by the financial institution alone does not substitute for the required authorization from the account holder.