Authorization Requirements Flashcards
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Read the first 6 Authorization Requirements flashcards as text
Which of the following is NOT a required element of a valid PPD debit authorization?
Answer: The Originator's profit margin or fee disclosure
While profit margin disclosures may be required by other laws, they are not a required element of a NACHA-compliant PPD debit authorization.
Stop payment requests from consumers regarding ACH debits must be honored by the RDFI if received:
Answer: In time to allow a reasonable opportunity to act before the scheduled debit
Under Regulation E and NACHA rules, the RDFI must honor a stop payment request if it is received in time for the institution to have a reasonable opportunity to act on it.
When an RDFI requests proof of authorization for a PPD debit entry on behalf of a disputing consumer, the ODFI must respond within:
Answer: 10 banking days of the request
NACHA rules require the ODFI (and thus the Originator) to provide proof of authorization to the RDFI within 10 banking days of a written request.
For ARC entries, the notice posted by the Originator at the point of check collection must be:
Answer: Clear and conspicuous, informing consumers that their check will be converted to an ACH debit
For ARC, NACHA requires a clear and conspicuous notice at the collection point (e.g., billing statement or return envelope) that checks may be converted to ACH debits.
Prenotification (prenote) entries sent before live dollar ACH entries allow an Originator to:
Answer: Test the validity of a Receiver's account information before sending live transactions
A prenote is a zero-dollar test entry that validates account and routing numbers before the Originator begins sending live dollar entries to that account.
A zero-dollar account verification entry sent before initiating WEB debits is used to:
Answer: Verify that the Receiver's account is open and the account number is valid
Zero-dollar verification entries (a form of prenote for WEB entries) confirm that the routing and account numbers are valid and the account is open before initiating live debit transactions.