Everything ACH

A TEL entry is a transaction for which the authorization is received, orally, over the telephone.  TEL should only be used for Business to Consumer transactions and can only be debits.  Single, one-time debits to be specific.

Authentication:  Unlike most ACH entries, TEL transactions require that the identification of the consumer be verified before the authorization piece takes place.*

 Authorization:  The authorization requirements are very specific for TEL transactions and yet the ACH Operating Rules also give you a workable option.  Here’s the deal:

 TEL authorizations require the following 6 pieces of information:

 Date of the authorization

Date on or after which the transaction will post

The consumer’s name

The amount

A telephone number that is available and answered during normal business hours

A statement by the Originator that the authorization will be used to originate an ACH Debit

And here’s the option.  The Originator gets to decide whether to record the conversation that includes the exchange of those 6 pieces of information, OR provide* a notice to the consumer detailing those 6 pieces of information. 

In addition to all of that, the Originator must state clearly during the telephone conversation that the consumer is authorizing an ACH debit entry to their account, express the terms of the authorization in a clear manner and the Receiver (Customer) must unambiguously express consent.  Silence is not express consent.

Before you can use TEL, there is one last thing you should understand.  A TEL entry can only be transmitted when 1) there is an existing relationship between the Originator and the consumer or 2) if there is not an existing relationship between the Originator and the consumer, then it is the consumer who initiated the telephone call to the Originator.

* Notes: 

The Originator must use a commercially reasonable procedure to verify the consumer’s Routing Number.

Provide does not mean that the notice must be received by the Receiver only that it must be sent.  Usually the postmark or time/date stamp of an e-mail is sufficient proof that notice was sent before the transaction posted to the consumer’s account.

Formatting requirement:  Originators must ensure that the name of the Receiver is included within each TEL entry.

Because TEL transactions are one-time debits, they cannot be returned as R07 – Authorization Revoked.

There is so much more I could probably tell you about TEL transactions, but that’s all the big stuff and some of the little stuff too.  All of that being said, stay tuned for POP next.