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Notice of ACH Rule Change

 

On September 16th 2011 the rules governing telephone authorized ACH transactions (TEL) will change. The new NACHA Rules permit recurring TEL debits to be originated when there is an existing relationship between the merchant and the consumer or where the consumer calls the merchant directly.

To obtain proper authorization for a recurring TEL debit the merchant must:

1) Make a recording of the oral authorization of the receiver which could include a live operator or automated voice response unit;

AND

2)  Send a written copy of the authorization to the consumer prior to the transaction posting to the consumers account. This written copy can be either a mailed postal letter or an email. We recommend obtaining the customers email or mailing address during the recording for validation purposes.

Furthermore:

  • The authorization must be readily identifiable as an authorization for a recurring transfer from the consumer's account.
  • State the terms of the recurring transfer clearly and in readily understandable terms.
  • State the consumer's identity with their confirmation that the identity is correct.
  • State that the consumer agrees to the terms and authorizes the merchant to send the debits.

At a minimum the authorization should include:

  • The name of the consumer who will be debited.
  • The customer service telephone number for the Merchant which the consumer can call with questions during normal business hours.
  • The date the authorization is recorded
  • The specific authorization language
  • The account and routing number of the consumers bank account
  • The timing and frequency of the debits
  • The amount of the debit or reference to how the consumer can determine the amount of the transfers (I.E. as shown on a website).

Source NACHA Operating Rules & Guidelines supplement 2-2010 ORXLIX

For clients using the ACHWorks WEB system the who are already processing TEL transactions the option to start processing recurring TEL transactions will automatically become available. If you are not sure if you are approved for TEL or would like to add the service please contact ACHWorks technical support.

For integrated clients on the SOAP 3, SOAP 4 or eChexIP systems that wish to start processing recurring TEL transactions please be aware that you will need to encode the transactions as recurring. In the OP Code section of your documentation you will need to add an "S" indicating it's a single transaction or an "R" indicating the transaction is recurring. If you have any questions once again please contact technical support.

Thank you,

ACHWorks Customer Service.