Unauthorized ACH Telephone Payments Down 88 Percent, NACHA Says

A sustained campaign by NACHA and its members has succeeded in lowering the rate of such unauthorized payments by 88 percent. On September 14, 2001 NACHA Operating Rules went into effect permitting consumers to make e-check payments over the telephone. An e-check over the telephone is an easy and convenient option for consumers to make one-time payments. NACHA estimates that consumers will make 175 million such e-check payments in 2003, mostly to pay bills such as credit cards, mortgages and utilities. In its rules, NACHA expressly prohibits use of e-checks by telephone in outbound telemarketing to consumers with whom there is no existing relationship. NACHA will be implementing additional measures to further improve risk management. These measures include requiring financial institutions that originate telephone e-checks to register with NACHA and identify the companies and payment processors that use their services, and adopting new rules to explicitly bind third-party payment processors to the NACHA rules. NACHA also will be developing a proposal to establish a cap on the dollar amount of a financial institutions originations as a percentage of its capital. The ACH Network has been safely used for over 30 years for many types of electronic payments. NACHA estimates that 135 million Americans use the ACH Network to receive their pay or government benefits by Direct Deposit. Consumers also paid three billion bills in 2002 using the ACH Network.