NACHA Approves Company Name Identification Rule
As part of an effort to improve ACH Network quality by reducing unrecognized transactions, "the voting membership of NACHA has approved the Company Name Identification Rule, an amendment to the NACHA Operating Rules that will enable consumers to more readily identify companies and other parties that are the sources of ACH transactions. Specifically, this rule will require a company to identify itself within the ACH transaction by the name that is known and readily recognized by the consumer."
The Rule also provides guidance on company identification requirements for specific types of ACH transactions, and in cases in which the originator of the transaction is not the ultimate payee or payor.
The Rule will take effect June 20, 2008.
“The Company Name Identification Rule is a component of NACHA’s comprehensive risk management strategy for the ACH Network,” said Roy DeCicco, senior vice president, JPMorgan Chase, and chairman of NACHA’s Risk Management Advisory Group. “The Rule will improve ACH Network quality by reducing the number of ACH payments that are unrecognized by consumers and that require investigation and exception handling by their financial institutions.”
NACHA’s most recent research indicates that problems with the identification of companies in ACH transactions happen infrequently. Consumers who don’t recognize transactions, however, are more likely to contact their financial institutions, which increases customer service costs.
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