New ACH Stop Payment And Written Statement Of
New ACH Stop Payment and WrittenStatement of Unauthorized DebitRequirementsPatty Presta, AAPMichael Gilchrist, AAP 2008 Western Payments Alliance. All rights reserved. No reproduction or distribution in any manner without prior written consent.
AgendazzzzzzzACH Stop Payment Requirements – Regulation EACH Stop Payment Rule Modification – NACHAOperating RulesACH Stop Payment FormNACHA Rule Amendment Regarding “UnauthorizedTransaction” DocumentationWritten Statement of Unauthorized Debit FormStop Payment and Unauthorized Transactions:Frequently Asked QuestionsQ&A2
ACH Stop Payment Requirements –Regulation EzOfficial Staff Commentary to Regulation E,205.10(c) Consumer’s Right to Stop Payment: *- 1. Stop-payment order. The financial institution musthonor an oral stop-payment order made at least threebusiness days before a scheduled debit. If the debit itemis resubmitted, the institution must continue to honorthe stop-payment order (for example, by suspendingall subsequent payments to the payee-originator untilthe consumer notifies the institution that paymentsshould resume).* Effective January 1, 20073
Previous NACHA Rule:ACH Stop PaymentzAn ACH stop-payment order applies to a single ACHdebitz The stop-payment order will remain in effect until theearliest of the following occur:- The debit entry has been stopped- The Receiver withdraws the stop-payment order- Six months elapses from the date of placement of thestop-payment order4
ACH Stop Payment Rule Modification –NACHA Operating RuleszBecause the FederalReserve Board’s StaffInterpretation haschanged over time, therehas been a divergencebetween the Rules andReg E over the intent of,and processingrequirements for, stoppayment orders on ACHdebits5
New NACHA Rule: ACH Stop Payment *Key Provisions:zEliminates the six-month time period after which a stoppayment order lapseszWhen the stop-payment order applies to more than onedebit entry, the order remains in effect until all suchentries have been stoppedzPermits the RDFI to require, in cases where the Receiverdesires to block all future payments related to a specificauthorization, that the Receiver confirm in writing that theReceiver revoked authorization with the Originator* Effective March 19, 2010. 2010 NACHA Operating Rules, “Revisions”section, pp 6-7; Page OR 30; Page OG 111.6
New NACHA Rule: ACH Stop Payment *Key Impacts to RDFIs:7z Costs of complianceborne by RDFI :- Modification ofexistingdocumentation- Modification of currentstop-payment systemplatform(s)- Staff education- Consumer education
ACH Stop Payment:Documentation ConsiderationszTransaction informationz Consumer notice requirements:- Three banking days .when?- Consumer liability to provide correct information- “Reasonable opportunity” .when?zPossible consumer responses:- Stop all future payments indefinitely- Stop the next payment only- Stop a series of payments8
ACH Stop Payment:Documentation ConsiderationszFeesz No fraudulent intentz Signature / Datez FI section9
Stop Payments Affecting Non-ConsumerAccountszRDFI may require a“reasonable opportunity” toact on the requestz Verbal stop payment ordersmay be confirmed in writingwithin 14 daysz Effective for 6 months, unlessrenewed in writingz Not affected by any provisionsor Regulation E10
NACHA Rule Amendment:Written Statement of Unauthorized DebitzzzzzzDefinition of an unauthorized entryModifications to written statementsMinimum information requirementsTimeframes associated with the Written StatementProcessRetention requirement for written statementUse of Return Code R3911
NACHA Rule Amendment:Written Statement of Unauthorized Debitz Definition of anunauthorized entry:- Revises current definition toan amount “different” than thatauthorized by the Receiver- Also applies to a debit basedon an authorization that is not“clear or is otherwise invalidunder applicable law”12
NACHA Rule Amendment:Written Statement of Unauthorized DebitzModifications to Written Statements:- Eliminates requirement that statement be made under“penalty of perjury”- Renames requirement “Written Statement ofUnauthorized Debit”- Avoids triggering any jurisdiction’s requirement that thedocument be notarized- RDFIs may continue to require such documents to benotarized at their discretion13
NACHA Rule Amendment:Written Statement of Unauthorized Debitz Minimum InformationRequirements:- Receiver’s printed name andsignature- Receiver’s account number- Party debiting the account(payee), as identified to theReceiver- Posting date of the entry- Dollar amount of the entry14
NACHA Rule Amendment:Written Statement of Unauthorized Debitz Minimum InformationRequirements:- Reason for return- Signature date- Receiver assertion that theWritten Statement is true andcorrect- Receiver assertion that theReceiver is an authorized signeror has authority to act on theaccount15
NACHA Rule Amendment:Written Statement of Unauthorized DebitzAdditional Provisions:- The Written Statement must be signed and dated on orafter the Settlement Date of the entry(ies) for whichrecredit is being requested- More than one unauthorized debit entry from a specificOriginator may be documented on a Written Statement,provided that all the transaction details as required by therule are provided for each transaction(s) for which theReceiver is seeking recredit16
NACHA Rule Amendment:Written Statement of Unauthorized Debitz Timeframes Associated with theWritten Statement Process:- Copy of Written Statement:reduces timeframe to producecopy from 60 days to 10 bankingdays following ODFIs writtenrequest- Retention Requirements: one yearfrom the Settlement Date of theadjustment entry17
NACHA Rule Amendment:Written Statement of Unauthorized DebitzUse of Return Code R39:- Expands current use of R39 code (Improper SourceDocument)- May now be used to return an ARC, BOC or POP whenthe source document has been presented for payment aswell as the check conversion entry- Will not require RDFI to obtain a Written Statement fromthe Receiver in this situation- Standard return time frame still applies- Potential impact to Originators18
NACHA Rule Amendment:Written Statement of Unauthorized Debitz WSUD Form:- Account/TransactionInformation- Statement- Signature19
WSUD FormzAccount / Transaction Information:-Account Holder NameAccount NumberAmount of DebitDate Debit Posted to AccountParty Debiting the Account20
WSUD FormzStatement:- Account holder gives statement as to why he/she believesthe transaction(s) in question are not authorized: Party not authorized to debit the account Authorization previously revoked on PPD, IAT orrecurring WEB transaction(s) Account debited prior to authorized date Account debited for amount different than authorized Check improperly processed electronically Other (specify)21
WSUD Formz Signature:- Must confirm status as“authorized signer” onaccount- Debit not originatedwith fraudulent intent- Attest to the accuracyand truth of thestatement22
Stop Payments: Frequently AskedQuestionsQuestion:I am still unsure as to when we are allowed to return anACH transaction as a stop payment. Isn’t the stoppayment return code only for ACH transactions that havebeen converted from a check?23
Stop Payments: Frequently AskedQuestionsAnswer:A stop payment order is intended to prevent an ACH entryfrom posting to the Receiver’s account. It is a proactivemeasure used by the RDFI to prevent its customer’saccount from being debited. A stop payment order can beplaced on any ACH transaction, regardless of SEC Code.By contrast, a return for “unauthorized” or “authorizationrevoked” is a reactive measure used to return an entry thathas previously posted to the Receiver’s account.24
Stop Payments: Frequently AskedQuestionsQuestion:Can we ask the customer at the time of the stop paymentrequest whether the stop is for a one time item or based ona revocation where there could be multiple future items?And, if so, could that be the determinant as to whether wehave to put the stop payment on as indefinite? How do wedocument the customer’s response?25
Stop Payments: Frequently AskedQuestionsAnswer:Yes. An RDFI must communicate with its customer inorder to have a clear understanding about the consumer’sintent with regard to stopping one, multiple, or all futurepayments. The answer to this question will help determinethe duration of the stop payment order. The rules do notaddress the documentation of a stop payment order. Themanner in which an RDFI obtains this instruction from itscustomers and the length of time such documentation isretained is a business decision to be made by each RDFI.26
Stop Payments: Frequently AskedQuestionsQuestion:The rule states the RDFI may require the consumer toconfirm in writing that the consumer has revoked theauthorization with the Originator before accepting a stoppayment order for all future debits. Does this mean theRDFI may require a copy of the revocation and, if it doesnot receive it, that the RDFI may refuse the consumer’srequest to stop payment for future debits? Do the FRBregulators agree with that interpretation?27
Stop Payments: Frequently AskedQuestionsAnswer:The RDFI should ask its customer if the intent is to stopone single payment or all future payments. If the intent isto stop all future payments, the RDFI may require thecustomer to confirm in writing that he has revoked theauthorization with the Originator. If the RFDI does notreceive this confirmation within 14 days, it may honorsubsequent debits to the account. This is consistent withthe Federal Reserve Board’s Official Staff Interpretation onRegulation E.28
Stop Payments: Frequently AskedQuestionsQuestion:If we begin to request/require copies of the account holderrevocation, do we open our institution up to any additionalliability regarding the account holder’s assertion?29
Stop Payments: Frequently AskedQuestionsAnswer:No. Both Regulation E and the NACHA Operating Rulespermit an RDFI to request written confirmation from theconsumer that he has revoked authorization with theOriginator. By obtaining this documentation, it should helpan RDFI comply with its obligation to prevent future entriesfrom posting by verifying that the consumer has instructedthat such transactions be stopped at their source.30
Stop Payments: Frequently AskedQuestionsQuestion:If the consumer says she revoked the authorization andshe wants the RDFI to stop all future payments, howshould the RDFI return any debits that come in?31
Stop Payments: Frequently AskedQuestionsAnswer:The RDFI must prevent any future payments from postingto the consumer’s account and return such entries usingR08.32
Stop Payments: Frequently AskedQuestionsQuestion:If a stop payment is placed for a recurring ACH debit, willthat stop payment order be in effect forever?33
Stop Payments: Frequently AskedQuestionsAnswer:If the consumer wishes to stop all future transactions, theFI must prevent all such transactions from posting to theconsumer’s account. The stop order must remain in effectfor as long as entries covered by the stop order could bereceived by the RDFI. To ensure that future entries are notoriginated, the FI should ensure that its customer hasrevoked authorization directly with the Originator, and itmay request the consumer to provide written confirmationof such action. If written confirmation is requested by theFYI but not provided, the FI may permit future entries topost to the account.34
Written Statements: Frequently AskedQuestionsQuestion:If a client has a Regulation E claim open for 3unauthorized items and two are from the same Originator,would the client have to fill out one WSUD for the twoitems with the same Originator, and another one for theother Originator?35
Written Statements: Frequently AskedQuestionsAnswer:Yes, multiple entries from the same Originator may beincluded on the same Written Statement provided that allrequired information is included for each entry. You maynot include entries from different Originators on the sameWritten Statement.36
Written Statements: Frequently AskedQuestionsQuestion:We were told that as long as our current WSUPPcontained the minimum information required we couldcontinue to utilize it. Is there a sunset date for financialinstitutions to convert their documentation to contain“Written Statement of Unauthorized Debit?”37
Written Statements: Frequently AskedQuestionsAnswer:All Written Statements must contain the minimum requiredinformation no later than March 19, 2010. If your currentWSUPP contains the required minimum information, youmay continue to use that version of the document,regardless of the title of the document.38
Written Statements: Frequently AskedQuestionsQuestion:If a corporate account receives a consumer entry and theRDFI returns it as unauthorized, does the RDFI have toobtain a Written Statement?39
Written Statements: Frequently AskedQuestionsAnswer:If the RDFI returns the entry within the 2 day return timeframe using R29, a Written Statement is not required. Ifthe RDFI uses the extended return time associated withconsumer entries (R07 or R10), the RDFI must first haveobtained a completed and signed Written Statement.40
Written Statements: Frequently AskedQuestionsQuestion:What are the best practices for handling returns beyond 60days?41
Written Statements: Frequently AskedQuestionsAnswer:Because an untimely return is likely to be dishonored bythe ODFI, the RDFI should contact the ODFI to discuss theproblem related to the unauthorized entry and determinethe manner in which the ODFI will make the RDFI wholefor an unauthorized debit entry.42
Conclusions 43zzzzzChanges implementedMarch 19, 2010Review currentdocumentation for stoppayments, WSUPPEnsure language is modifiedto meet rule and RegulationrequirementsContact your RPA forsample formsGet blessing from legal !
Resourcesz2010 ACH Operating Rulesz Regulation E, Official StaffCommentary: 205.10(c),Consumer’s Right to StopPaymentz Operating Guidelines SampleWSUDz RPA Sample Stop PaymentForms44
Contact InformationContact your local RPA !45
Thanks for ParticipatingTHANK YOU!PLEASE –Complete yourevaluation form!!46
requirements for, stop payment orders on ACH debits. 6 New NACHA Rule: ACH Stop Payment * Key Provisions: zEliminates the six-month time period after which a stop-payment order lapses zWhen the stop-payment order applies to more than on
ACH Facts An ACH Originator is any entity or person that creates an ACH transaction. ACH entries are categorized as "consumer" or "corporate." ACH is capable of crediting or debiting checking or savings accounts. ACH entries are received by most financial institutions. ACH is a batch system (not real time).
All prenotes are originated 3 business days prior to sending a live dollar transaction. 1. Select the New Payment option button. 2. From the ACH Type list, select the ACH type. 3. Click Continue Note: The ACH Type list only displays the ACH types for which the user has permissions. Business Online ACH Origination Guide February 2019 Page 13
Transactions (for purposes of this ACH Agreement, each of such accounts while so designated, an "Account"). In the event of conflict between the Transactional Services Agreement or the BDA and this ACH Agreement, the terms of the ACH Agreement will prevail with respect to the ACH Services and ACH Transactions. b.
ACH Origination Guide ACH Facts & ACH Originator Responsibilities PD-cm-000115 (1/4/2018) Page 1 of 14 The ACH Network, which provides for the interbank clearing of electronic payments, is governed by The NACHA Operating Rules and Guidelines (Rules).
notify you when they are ready to begin running the ACH jobs. 11) Once the ACH jobs are running, approve the ACH payments online using Screens 502 and 503:00before 11 am each day. 12) Verify ACH transactions using the approved ACH register.
ach@Scarbrough-intl.com 1. Scarbrough ACH team will provide the U.S. Customs Form 400 2. ACH team will fill out as much as they can for the importer 3. Scarbrough ACH Team will send U.S. Customs Form 400 to importer for final completion 4. Importer returns completed U.S. Customs Form 400 to ach@Scarbrough-intl.com 5.
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Archaeological illustration (DRAWING OFFICE) – DM‐W This week the class will be divided into two groups, one on the 25. th, the other on the 26. th, as the drawing office is too small for the entire group. Week 10 01.12.09 Introduction to the archaeology of standing remains (OUT) – DO’S Week 11 8.12.09 Interpreting environmental data (LAB) ‐ RT. 3 AR1009 28 September 2009 Reading The .
