The 1170 payee bank response indicates that a payment has been rejected by the receiving bank because the terms and conditions of the payee's account do not permit the crediting of those specific funds.
Understanding the 1170 Payee Bank Response
When a payment is initiated, especially through fast payment systems, banks use various codes to communicate the status or outcome of a transaction. The "1170" response code is a specific notification from the payee's bank, signifying a particular reason for the rejection of an incoming payment.
What Does 1170 Mean?
Essentially, a 1170 response means that the payment, despite being sent successfully by the originating bank, could not be accepted into the recipient's account. This rejection is due to specific rules or agreements associated with the payee's bank account. These rules are part of the account's terms and conditions, which outline what types of transactions or funds are permissible. It's not an issue with the sender's account or insufficient funds from the sender's side, but rather a limitation on the recipient's account itself.
Common Reasons for a 1170 Rejection
While the exact reason is tied to the individual payee's account agreement, several scenarios can trigger a 1170 rejection:
- Account Type Restrictions: Certain bank accounts, such as basic accounts, savings accounts, or specific business accounts, may have limitations on the types, sources, or amounts of incoming funds they can receive. For example, an account might not be set up to receive commercial payments, or it might have limits on foreign currency transfers that exceed certain thresholds.
- Compliance and Regulatory Issues: Banks have stringent regulations to prevent fraud, money laundering, and other illicit activities. If an incoming payment's nature or origin raises a red flag, or if it doesn't align with the payee's declared account purpose, it might be rejected.
- Account Status: If an account is dormant, frozen, or has specific restrictions placed upon it (e.g., due to legal proceedings, a hold, or an ongoing investigation), it may be unable to receive new credits.
- Mismatch in Account Purpose: A personal account attempting to receive high-volume business transactions, or vice versa, might trigger an internal policy that leads to rejection.
Summary of 1170 Response
To provide a quick overview, here's a table summarizing the key aspects of a 1170 rejection:
| Aspect | Description |
|---|---|
| Code | 1170 |
| Origin | Receiving Bank (Payee's Bank) |
| Reason | The payment is rejected because the payee's account terms and conditions do not allow these funds to be credited. |
| Impact | Funds are returned to the sender. |
| Primary Cause | Restrictions on the payee's account itself, not typically sender-related issues. |
Steps to Resolve a 1170 Rejection
If you're the sender or the payee encountering a 1170 response, here's how to address it:
- For the Payee:
- Contact Your Bank: The payee should immediately contact their bank for a detailed explanation of why the payment was rejected. They need to inquire about the specific terms and conditions that were violated by the incoming funds.
- Review Account Terms: Familiarize yourself with the terms and conditions of your account to understand any limitations on incoming payments.
- Consider Account Changes: If the account type is consistently hindering necessary transactions, discuss options for changing the account type or opening a more suitable account with your bank.
- For the Sender:
- Inform the Payee: Notify the payee about the 1170 rejection and advise them to contact their bank.
- Request Alternative Details: Once the payee has clarified their account limitations, ask for alternative bank details (e.g., a different account or an account with fewer restrictions) to resend the payment.
- Check Payment Details: Although less common for a 1170, always double-check that the account number and sort code are correct before attempting a resend.
Preventing Future 1170 Rejections
To avoid similar issues in the future, both parties can take proactive steps:
- Payee Education: Payees should understand the capabilities and limitations of their bank accounts, especially if they anticipate receiving various types of payments (e.g., from businesses, international sources, or large sums).
- Clear Communication: Senders and payees should communicate clearly about the nature of the payment and the expected recipient account type. For example, if a business is paying an individual, confirming it's a personal account capable of receiving such payments can help.
- Validate Account Suitability: Before arranging a significant or unusual payment, the payee could confirm with their bank that their account is suitable for receiving the specific type of funds expected.
Understanding the 1170 response code helps in quickly diagnosing and resolving payment rejections, ensuring smoother financial transactions.
