Common use of Telephone-Based and Internet-Based Entries Clause in Contracts

Telephone-Based and Internet-Based Entries. NACHA in its role of ensuring the safety, security, and viability of the ACH network has determined that certain single-use or limited-use consumer authorizations such as for the payment of purchases made by telephone or over the internet have the potential to increase risk in the ACH system and compromise system effectiveness by the increasing the incidence of returned entries. Therefore, in order for Originator to qualify to submit such Entries for processing, the following conditions must be met: a. Entries representing the settlement of telephone-based sales must be identified via Originator’s use of NACHA’s “TEL” Standard Entry Class code as defined in the Rules; entries representing the settlement of internet-based sales must be identified via Originator’s use of NACHA’s “WEB” Standard Entry Class code as defined in the Rules. b. For transactions related to telephone-based or web-based purchases, Customer’s use of any Standard Entry Class codes other than TEL or WEB in order to avoid the increased scrutiny required for such transactions shall constitute a violation of applicable law and will result in Originator’s immediate loss of ACH Origination rights regardless of any termination notification period otherwise specified in this Agreement. c. Originator will utilize commercially reasonable methods to establish the identity of the Receiver, and hereby warrants to Bank that each such Receiver has authorized Originator to submit ACH Entries to their accounts in settlement of transactions to which Receiver has agreed. d. As required by the Rules, Originator must maintain records such as telephone voice recordings or logs from an internet ordering system as proof of each Receiver’s authorization. Bank from time to time may (without any obligation or duty to do so) require Customer to make such records available for Bank’s review.