ACH Authorization Requirements

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Michael Roberts
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1 ACH Authorization Requirements

2 Single Entry TEL (Telephone Initiated Entry) The authorization is not required to be provided to the consumer in writing, however as the authorization is received orally, the merchant must record the authorization, or have, at an earlier date provided written notice that is followed up with an oral authorization. The following information must be included in the authorization: The date on or after which the consumer's account will be debited; The amount; The customer's name; A telephone number that is available to the customer and answered during normal business hours; The date of the customer's oral authorization; A statement by the merchant that the authorization obtained will be used to originate an ACH debit. A method by which the receiver can revoke authorization (Telephone, , etc.)

The following information must be included in the authorization: The date on or after which the consumer's account will be debited; The amount; The customer's name; A telephone number that is

3 Recurring Entry TEL (Telephone initiated Entry Merchants are required to both audio record the consumer's oral authorization and to provide a written copy of the authorization to the consumer. The authorization must be readily identifiable as an authorization and must have clear and readily understandable terms, which must include: Amount of the recurring transactions; The timing (including start date), number and/or frequency of EFTs; The customer's name; The account to be debited; A telephone number that is available to the customer and answered during normal business hours; The date of the customer's oral authorization; The method by which the customer can revoke authorization (Telephone, , ect.)

The authorization must be readily identifiable as an authorization and must have clear and readily understandable terms, which must include: Amount of the recurring transactions;

4 TEL Authorization Sample Script To confirm your payment, I understand that you, [consumer s name] authorize [merchant s name] to charge your [bank account type] on [month, day, year] for the amount of [$X.XX] for [description of the transaction]. The account information you ve provided me is as follows: Bank Name: [name of the customer s bank] Bank ABA Routing Number: [customer s bank s ABA routing number] Bank Account Type: [checking, business checking, savings] Bank Account Number: [the customer s bank account number] Is this information correct? As of today s date, [month, day, year], this payment authorization is valid and to remain in effect until you, [customer name], notify [merchant s name] of its cancellation by calling [merchant s customer service number]

The account information you ve provided me is as follows: Bank Name: [name of the customer s bank] Bank ABA Routing Number: [customer s bank s ABA routing number] Bank Account Type: [checking,

5 PPD (Prearranged Debit) Direct payment is a debit application. Through a written authorization, the consumer grants the merchant authority to initiate a debit either one time or re-occurring to his or her account. PPD authorizations must: Be in writing; Be readily identifiable as an ACH authorization; Have clear and understandable terms; Provide that the consumer may revoke authorization only by notifying the originator in the manner specified in the authorization. (provide merchant phone number); Be either signed or similarly authenticated by the consumer.

6 PPD Authorization Sample

7 WEB (Internet/Mobile Initiated Entries) Debit WEB entries are used by commercial originators to debit a consumer based on an authorization that is communicated, other than by oral communication, from the consumer to the originator via the internet. The authorization must conform to the NACHA rule requirements, which require that: The authorization must be in a writing that is signed or similarly authenticated by the merchant via the internet; The authorization must be readily identifiable as an ACH debit authorization; The authorization must express its terms in a clear and readily understandable manner; The authorization must provide the consumer with a method to revoke their authorization by notifying the originator in a manner prescribed;

The authorization must conform to the NACHA rule requirements, which require that: The authorization must be in a writing that is signed or similarly authenticated by the merchant via the

8 WEB Authorization Sample Script

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