Nacha is publishing the attached form, entitled “Indemnification Agreement – Request for Return of Funds from ACH Entry” (“Indemnification Agreement”), for use by financial institutions in certain situations in which an ODFI requests the return of funds from an ACH transaction, and the RDFI desires to receive a written indemnification in addition to the indemnification contained in the Nacha Operating Rules (“Rules).”

The following question and answer format is intended to provide guidance to RDFIs in responding to the needs of their account holders while remaining in compliance with the requirements of the Nacha Operating Rules.

Use of the PPD Standard Entry Class Code for the conversion of consumer checks accepted at the point of purchase for payment of goods and services is not expressly recognized under the Nacha Operating Rules, as the POP application was designed with the express purpose of converting checks at the point of purchase. 

The following question and answer format is intended to provide guidance to RDFIs in responding to the needs of their account holders while remaining in compliance with the requirements of the Nacha Operating Rules.

The ability to respond knowledgeably to customer inquiries will be an important contributor to customer acceptance of these transactions, as well as customer satisfaction with their financial institutions.

This Operations Bulletin is intended to identify specific risk management concerns related to the origination of TEL entries and to clarify key rules obligations with respect to proper authorization and use of the TEL application.