Glossary

NSF (non-sufficient funds)

A returned payment for lack of funds.

An NSF event is a payment returned because the account lacked funds; an overdraft is the bank covering it for a fee. Both appear on statements and are closely watched by revenue-based underwriters as a sign of cash strain. A few with an explanation are usually acceptable; a pattern is a common decline reason.

How it appears in a contract

Returned-debit fees in the ACH authorization; some agreements treat repeated returns as default.

Worked example

Three NSFs in one month because a customer’s check bounced, followed by three clean months, reads very differently from three NSFs every month.

Illustrative figures on stated assumptions; not quotes.

What to ask

• How many NSFs in a month is a decline?
• Can I explain specific events in the application?
• What is the provider’s fee for a returned debit?

Related terms

Bank statement underwriting · ACH remittance · all terms