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The National Automated Clearing House Association’s (NACHA) has issued a new WEB Debits Rule, with a one-year no-action period for companies working toward compliance.
The rule takes effect on 19 March 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 organisations that allow US 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.
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