NACHA updates rules of consumer ACH debits

One of the limitations of the prior NACHA Operating Rules was that consumer debit authorisations were required to either be ‘recurring,’ meaning that the debits were pre-scheduled at regular intervals, or ‘single,’ meaning that each separate authorisation had to include all the information required under the NACHA Rules for a debit authorisation, based on the type of entry (such as TEL or WEB), and be separately authorised by the consumer.

Standing authorisations may be obtained in writing, electronically or orally. The Operating Rules establish requirements for the content of, and method of memorialising, the authorisation. The authorisation itself will need to specify how future debits may be initiated by the consumer, and each future debit is referred to as a ‘subsequent entry’ under the Operating Rules.

Each subsequent entry must be separately initiated by an affirmative act of the consumer, but the permissible methods for initiating a subsequent entry are extensive, and include telephone calls, Internet interactions, text messages, transactions at an ATM or point-of-sale terminal, and email. Depending on how the subsequent entry is initiated, it may be classified under the NACHA Operating Rules as a TEL, WEB, PPD, POS, MTE, or SHR debit entry for purposes of processing.