Workaround for bill payment Error 10501 (and sometimes Error 2000)

Here's a workaround for a bill payment problem that you may encounter.

I pay bills using Quicken 2019 Bank Bill Pay (AKA "direct connect").  My bank is Bank of America.

Some bill payments have been failing with Error 10501 "PAYEE STATUS IS INACTIVE".

I've talked to Quicken support twice about this error; they have no suggestions other than deleting and re-entering the payee, or deleting the entire Quicken data file and starting over from scratch.  Neither of these is likely to help you.

I've done quite a bit of research into this problem.  I'm presenting my information here in hopes that it might help somebody else.

When Quicken sends a bill payment instruction to the bank, it transmits the payee name, address, phone number, account number, and payment amount.  (Technically-inclined folks can see this by looking at OFXLog.txt)

The bank's computer examines the payee information to confirm that it's correct.  If so, it accepts the payment instruction.  If the bank dislikes something about the payee information, it will reject the payment with Error 10501.  (Bank of America occasionally sends Error 2000, which is a misleading error code to use, but There You Go.)

Bank of America is especially picky when the payee accepts bulk payments.  (This means that the bank aggregates a day's worth of payments into one large payment.)  This is likely to be the case for large companies like utilities.  When accepting requests to pay such a company, Bank of America requires that the payee information match exactly with what Bank of America has on file.  If there's even a tiny disagreement about something as simple as the company's phone number, the bank may refuse to accept the payment, rejecting it with Error 10501 or Error 2000.

You can try to recover from the problem by editing the payee information in Quicken.  But you're shooting blind.  Is the payee named "Comcast" or "Comcast Communications" or "Comcast Communications Company, Inc."?  Is the address "PO Box 123" or "P.O. Box 123"?  Is it a PO Box at all?  Large companies often want direct payments to be sent to a completely different address from what's on your billing statement (you have to call the company's billing department to find out).

You can spend hours editing the payee in Quicken as you try to guess what combination of name, address, and phone number is needed to placate the bank.  And you may never win that game.

Here's an easier way:
  1. Log in to your bank's web site and navigate to its online bill pay page.
  2. Create the payee using on the bank's site.
  3. Log out of your bank's web site.
  4. In Quicken, open the register for your bank.
  5. Select Account->Update Selected Online Account.  Quicken will connect to your bank and download information about the new payee.
  6. You can now use Quicken to pay the newly-downloaded payee.
If you're curious, take a look at the details about the newly-downloaded payee.  It probably has a different address from what's on your statement.  (One common feature is that the first line of the payee address will actually be the business' full legal name.  Bet you didn't think of trying that.)
Sign In or Register to comment.