Issue
We received the following notes on April 25th, 2022
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Nacha Account Validation:
Is Your Institution Compliant?
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The Nacha WEB Debit Account Validation Rule is now in effect and being enforced to ensure all organizations are adequately screening WEB debits for fraud. Non-compliant institutions will receive a warning in order to address the compliance issue. If the issue is not corrected, the institution may be fined or suspended from ACH network participation.
The Nacha regulation applies to every payment originator, including higher education institutions, processing WEB Debit payments. The change applies to Article Two, Subsection 2.5.17.4 (Additional ODFI Warranties for Debit WEB Entries) and increases the threshold for account validation safeguards.
Currently, ACH Originators of WEB debit entries are required to use a “commercially reasonable fraudulent transaction detection system” to screen WEB debits for fraud. This existing screening requirement will be supplemented to make it explicit that “account validation” is part of a “commercially reasonable fraudulent transaction detection system.” The supplemental requirement applies to the first use of an account number, or changes to the account number.
TouchNet can help your institution meet these compliance requirements with the automated, real-time, frictionless solutions below.
TouchNet ACH Options
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Merchant Services
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ACH Validation with Customer Bank
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- Integrated Payment Points
- ACH Validation
- End-to-End Encryption
- Return Automation General Ledger Updates
- One Place to Reconcile
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- Integrated Payment Points
- ACH Validation
- File Encryption
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More Information
Contact your Client Success Manager or Sales Representative today to learn more about how TouchNet can help your institution meet the Nacha WEB Debit Account Validation Rule.
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Solution/Response
We reached out to Tuong Ho at UH. His team manages our TouchNet SFTP feed. Based on his input, this issue relates to ACH. UH is not using these features, which I believe apply to other Touchnet products. I don’t believe your [UHCL's] feed is impacted.