Download Industry Survey

Warranty Claims on Remotely Created Checks
Through the ACH Network
Industry Survey
December 16, 2008
Response Deadline February 6, 2009
This Request for Information regards a concept that would allow paying banks to make warranty
claims on unauthorized Remotely Created Checks (“RCC”) through the ACH Network.
Responses are due February 6, 2009. In order to determine the scope of interest by ACH
Network participants and other payment system stakeholders, NACHA seeks input from a broad
range of organizations, as well as from various functional responsibilities within organizations.
Financial institutions may need to coordinate responses between both ACH and check
operations.
NACHA specifically seeks input from:
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Financial institutions’ ACH and check operations;
Financial institutions’ risk management/security/legal departments;
ACH Network end-users (e.g., corporate Originators and Receivers);
Financial institution regulators;
Law enforcement and consumer protection agencies;
Any other interested parties or relevant functional area.
Survey responses or other comment letters are due to NACHA by February 6, 2009.
NACHA Staff Contacts
Return completed surveys to:
Questions:
Maribel Bondoc, Manager, ACH Network Rules
Fax (703) 787-0996
E-mail: [email protected]
Michael Herd, AAP, Managing Director, ACH Network
Rules
Phone (703) 561-3924
E-mail: [email protected]
Ian Macoy, AAP, Managing Director, Network
Development
Phone (703) 561-3929
E-mail: [email protected]
NACHA Request for information - Warranty Claims on RCCs
Participant Survey, 12/16/08, Page 2
Section I - Respondent Information
Name:
Title:
Organization:
Phone:
E-mail:
Please indicate your organization’s role(s) in the ACH Network:
ODFI
RDFI
ACH Operator
Originator
Receiver
Regional Payments Association
Government
Third-Party Service Provider
Software Vendor
Industry Association
Other
Would your organization be willing to be contacted in order to provide more information on the
topics included within this survey?
Yes
No
Financial Institution Respondents – Please Complete
Asset Size
____ less than $250 million
____ $1 - $100 billion
Annual ACH origination volume
# entries
Annual ACH received volume
# entries
____ $250 million - $1 billion
____ greater than $100 billion
$
$
What areas of your organization provided input for the responses to this survey?
___ ACH Operations
___ Check Operations
___ Risk Management/Security
___ Legal
___ Customer Service
___ Information technology/software
___ Other: ______________________
Corporate Originators and Receivers – Please Complete
Annual ACH origination volume:
Annual ACH received volume:
# entries
# entries
$
$
NACHA Request for information - Warranty Claims on RCCs
Participant Survey, 12/16/08, Page 3
Third Party Service Providers and Software Vendors – Please Complete
Which parties to ACH payments do you serve?
Originators
ODFIs
RDFIs
Section II - Overall Concept
1. Are unauthorized RCCs a problem for financial institutions and/or their customers?
Yes
No
Don’t Know
Specify why or why not:
If yes, is the problem increasing or decreasing?
Increasing
Decreasing
Don’t Know
Specify why:
2. Will allowing paying banks to make warranty claims on RCCs through the ACH Network
address this problem?
Yes
No
Don’t Know
Specify why or why not:
3. Does your organization support the concept of allowing paying banks to make warranty
claims on RCCs through the ACH Network?
Yes
No
Don’t Know
Specify why or why not:
If yes, should there be a time limit in which the warranty claim can be made? (The current
Federal Reserve check adjustment system requires the claim to be made within 90 days.)
NACHA Request for information - Warranty Claims on RCCs
Participant Survey, 12/16/08, Page 4
_____ 60 days (consistent with unauthorized ACH debits)
_____ 90 days (consistent with Federal Reserve check adjustments)
_____ 1 year (consistent with Regulation CC warranty)
_____ Other: ___________________________
4. Under this concept, NACHA and the ACH Operators would be able to collect data on the
sources of unauthorized RCCs. Would this data be of value to payments system stakeholders
and/or others?
Yes
No
Don’t Know
Specify why or why not:
5. Are there other payment-related warranty claims that could be made via the ACH Network?
Yes
No
Don’t Know
Please specify:
Section III – Financial Institutions
Paying Banks/ODFIs
In this concept, the paying bank of the RCC is both the Originator and ODFI of a forward ACH
debit (the warranty claim entry).
6. How significant a problem are unauthorized RCCs for your organization? (1 = not significant,
5 = very significant)
1 – Not significant
2
3
4
5 – Very significant
Don’t Know
Specify why:
NACHA Request for information - Warranty Claims on RCCs
Participant Survey, 12/16/08, Page 5
7. Please estimate the number of RCCs per month that your customers claim are unauthorized.
Number of RCCs per month that are claimed to be unauthorized:
__
_________
______
Of this number, please estimate the number or percentage for which you make a warranty
claim:
Of the number for which you make a warranty claim, please estimate the number or
percentage which occur before 90 days and after 90 days of the original presentment:
Before 90 days:
After 90 days:
8. How do you currently make warranty claims for unauthorized RCCs that are within the 90day period after the original presentment (check all that apply)?
_____ Fed adjustments
_____ Clearinghouses
_____ Without-entry claims made directly to bank of first deposit
_____ We don’t
_____ Other: _______________________________
9. Do you currently make warranty claims for unauthorized RCCs after the 90-day period after
the original presentment?
Yes
No
Don’t Know
Why or why not?
10. Do you have a dollar threshold for making claims (i.e., you do not make a claim for RCCs
below a certain dollar amount)?
Yes
No
If yes, please indicate a range or the exact threshold:
_____ $0-50
_____ $50-100
Don’t Know
NACHA Request for information - Warranty Claims on RCCs
Participant Survey, 12/16/08, Page 6
_____ $100-250
_____ Above $250
OR
_____ Exact Amount: $__________________
11. What is the average dollar amount (or range) of your warranty claims?
_____ Average Dollar Amount: $__________________
OR
Range:
_____ $0-50
_____ $50-100
_____ $100-250
_____ Above $250
12. If warranty claims for unauthorized RCCs could be made through the ACH Network, would
your organization be interested in using it?
Yes
No
Don’t Know
Specify why or why not:
13. If the time period for making the claim via ACH was longer than 90 days after the original
presentment, would your organization be more likely to use it?
Yes
No
Don’t Know
Specify why or why not:
Operational Considerations
14. Can your organization manually originate a forward ACH debit entry?
Yes
Specify how or why not:
No
Don’t Know
NACHA Request for information - Warranty Claims on RCCs
Participant Survey, 12/16/08, Page 7
If yes, would the department or personnel responsible have access to the RCC (original or
image/copy) in order to obtain the necessary information?
Yes
No
Don’t Know
Specify why or why not:
Would the department or personnel responsible be able to identify the bank of first deposit
from the information on the RCC?
Yes
No
Don’t Know
Specify why or why not:
15. Can your organization manually create an ACH addenda record that would carry additional
information about the RCC, if necessary, such as an account number and/or check sequence or
research number?
Yes
No
Don’t Know
Specify why or why not:
16. Does manually creating ACH debit entries create any new risk management issues?
Yes
No
Don’t Know
Specify why or why not:
17. Does your organization have any other concerns or comments on how warranty claims
would be processed or other operational considerations?
Yes
Please specify:
No
Don’t Know
NACHA Request for information - Warranty Claims on RCCs
Participant Survey, 12/16/08, Page 8
Banks of First Deposit/RDFIs
In this concept, the bank of first deposit is both the RDFI and Receiver of a forward ACH debit
(the warranty claim entry).
18. How significant a problem are unauthorized RCCs for your organization? (1 = not
significant, 5 = very significant)
1 – Not significant
2
3
4
5 – Very significant
Don’t Know
Specify why:
19. Please estimate the number of warranty claims for unauthorized RCCs that your
organization receives per month:
Number of warranty claims for RCCs per month:
__
_________
______
Of the number for which you receive a warranty claim, please estimate the number or
percentage which occur before 90 days and after 90 days of the original presentment:
Before 90 days:
After 90 days:
20. What is the average dollar amount (or range) of the warranty claims you receive?
_____ Average Dollar Amount: $__________________
OR
Range:
_____ $0-50
_____ $50-100
_____ $100-250
_____ Above $250
NACHA Request for information - Warranty Claims on RCCs
Participant Survey, 12/16/08, Page 9
Operational Considerations
21. What information would your organization need to receive with the warranty claim to be able
to process it?
Please specify:
22. Would the personnel or department receiving the warranty claim have access to the
information or systems necessary to process it?
Yes
No
Don’t Know
Specify why or why not:
23. If your organization received an ACH debit to a general ledger account for a warranty claim,
how would your organization process or handle it?
Please specify:
24. If the ACH debit carried the original depositor’s account number in an addenda record,
how would your organization process or handle it?
Please specify:
25. Does your organization have any other concerns or comments on how warranty claims would
be processed or other operational considerations?
Yes
Please specify:
No
Don’t Know
NACHA Request for information - Warranty Claims on RCCs
Participant Survey, 12/16/08, Page 10
Section IV - Other General Questions
26. What benefits does your organization believe would be derived from this concept?
27. Does your organization have any concerns about or foresee any negative effects/risks related
to this concept?
28. In order for the ACH Operators and NACHA to collect data on warranty claim entries, the
transactions would have to be uniquely identified. Does your organization have any suggestions
or preference on how warranty claim entries can be uniquely identified?:
_____ New Standard Entry Class (SEC) Code
_____ Unique transaction description in Company Entry Description field (similar to
defined descriptions for reversing and reclamation entries)
_____ Don’t know
_____ Other
If other, please specify:
29. Please identify any other specific issues that have not been addressed elsewhere in this ACH
Participant Survey (feel free to attach additional pages):