Enforcement of the rule for covered entities will take effect March 19, with a one-year no-action period for companies working toward compliance.
3/18/2021 10:30
The National Automated Clearing House Association’s (NACHA) new WEB Debits Rule takes effect March 19, 2021, although NACHA’s Board of Directors previously approved a no-action period through March 19, 2022, during which NACHA will not enforce the new rule against any covered entity working in good faith toward compliance.
The rule will affect all organizations that allow consumers to make payments via the internet or mobile devices and that directly debit (i.e., electronically withdraw) payment from consumers’ checking accounts.
The WEB Debits Rule (formally, the “Supplemental Fraud Detection Standards for Debits” WEB Account Validation Rule) modifies requirements imposed on originators of WEB debits. Originators must now validate consumers’ account information upon first use prior to initiating an ACH debit transaction. Originators need not, however, validate account information already being used for WEB debits or other types of ACH payments. The new account validation requirement will apply whenever a consumer designates a checking account for an electronic (ACH) payment that will be taken or initiated over an online channel. This includes any change the consumer may make to the account number being used for a series of online payments.
The new rule does not require specific account validation methods or technologies, but it suggests that commercially reasonable options include: ACH prenotifications, ACH microtransaction verification and commercial validation services. Members that accept payments from consumers via direct debit should consider contacting their financial institution to determine whether it offers or recommends any validation method or service—and, if it does not, whether it recommends a commercially reasonable standard for the accounts receivable management industry.
For more information, visit NACHA’s Account Validation Resource Center and review NACHA Operations Bulletin 7-2020.