ACH payments are electronic payments that are created when the customer gives an originating institution, corporation, or other customer (originator) authorization to debit directly from the customer's checking or saving account for the purpose of bill payment. ACH transactions are managed by NACHA Operating Rules, which clearly define the rules and responsibilities of ACH network participants. ACH payments are subject to Regulation E, which provides application guidelines for the laws set forth in Dodd Frank regarding electronic funds transfers. Reg E is enforced by the Consumer Financial Protection Bureau.
Marketing of ACH payment services, and disclosures associated with those services must comply and follow all guidelines of the appropriate regulatory bodies. Enforcement actions may be brought upon by:
- The Federal Trade Commission (“FTC”)
- Consumer Financial Protection Bureau (“CFPB”)
- Electronic Payments Association (“NACHA”)
Additionally, the Platform will not reference Synapse or Synapse's bank partners in any other way, without express written permission from the respective entity.
In addition to the CFPB UDAAP requirements, Synapse will require the Platform to be compliant with all requirements set forth in Regulation E (“Reg E”), and the Electronic Fund Transfer Act (“EFTA”) to the extent applicable. This Act states:
- Disclosures must be clear and easily understood, in writing, and in a form the consumer may keep.
- The disclosures may be provided via electronic form if the consumer has affirmatively consented, after receiving a notice compliant with the E-Sign Act.
- Disclosures may be made available in a language, other than English, if they are also made available in English upon request.
- Disclosures must be compliant with Part 205.7 of Reg E, detailing the timing and content pertaining to initial disclosures.
- Disclosures are required to contain the following information as it applies:
- Liability of the user for unauthorized electronic funds transfers
- Telephone number and address for the user to report possible fraud
- Platform’s business days
- Limitations on frequency or dollar amounts related to transfers
- Any fee that may be imposed
- Summary of the user’s right to receipts and periodic statements
- Summary on the user’s right to stop payment, and the procedures for doing so
- The liability of the Platform to the user for failure to make or stop certain transfers
- The circumstances under which, in the course of business, the Platform may provide information related to the user’s account to third parties
- Error resolution notice (See Model form A-3)
- Any notice of a change of terms must be mailed or delivered to the user at least 21 days before the effective date
The Platform must provide contact information for Users to submit ACH disputes (written statement of unauthorized debit). This information is included in the receipt confirmation, sent to users, but should also be listed on their contact page within their website or application, and should be easy to locate.
We have detailed procedures for ACH disputes, detailed in the “ACH Error Resolution” standard operating procedure, in compliance with Regulation E.
When processing ACH transfers, customer bases with Limited English Proficiency (“LEP”), should be considered. CFPB released guidance related to LEP, as it relates to UDAAP law, ensuring disclosures are clear to consumers. Additionally, 12 CFR Part 1005 of Regulation E states:
- Required disclosures must be made available in English and, if applicable, either in
- Each of the foreign languages principally used by the remittance transfer provider to advertise, solicit, or market remittance transfer services, at offices where a sender can conduct a transaction or assert an error; or
- The foreign language primarily used by the sender with the remittance transfer provider to conduct the transaction, provided that such foreign language is used by the transfer provider to advertise, solicit, or market transfer services
The Platform will adhere to the verbiage and placement requirements, set forth in the Marketing/Disclosure Guidelines, in their website and/or application.
If you are debiting User accounts via ACH (i.e. a User’s ACH-US node), include a checkbox and the following appropriate ACH authorization verbiage on the web page the transaction is being created:
Single Transaction Authorization:
"I authorize <Platform Name> to debit the account indicated for the amount noted on today’s date. I will not dispute <Platform Name> debiting my account, so long as the transaction corresponds to the terms in this online form and my agreement with <Platform Name>."
Recurring Transaction Authorization:
"I authorize <Platform Name> to debit the account indicated for the recurring transactions according to the online form and my agreement with <Platform Name>. I will not dispute so long as the transactions correspond to such terms. This payment authorization is valid and will remain effective unless I cancel this authorization by emailing <Platform Name> at <Platform email> at least 3 business days in advance.”
Additionally, please include the following Electronic Fund Disclosure Statement in your Terms of Service:
Electronic Fund Transfer Disclosure Statement
The following disclosures are made in accordance with the federal law regarding electronic payments, deposits, transfers of funds and other electronic transfers to and from your account(s). There may be limitations on account activity that restrict your ability to make electronic fund transfers. Any such limits are disclosed in the appropriate agreements governing your account.
A. Definitions: Electronic Fund Transfer: Any transfer of funds, other than a transaction originated by check, draft or similar paper instrument, that is initiated through an electronic device or computer to instruct us to debit or credit an account. Electronic Fund Transfers include such electronic transactions as direct deposits or withdrawals of funds, transfers initiated via telephone, website or mobile application. Preauthorized Electronic Fund Transfer: An Electronic Fund Transfer that you have authorized in advance to recur at substantially regular intervals; for example, direct deposits into or withdrawal of funds out of your account.
B. Your Liability: Authorized Transfers: You are liable for all Electronic Fund Transfers that you authorize, whether directly or indirectly. Unauthorized Transfers: Tell us at once if you believe your account or PIN or Access Information (as defined below) is lost or stolen or has been or may be subject to unauthorized Electronic Fund Transfers. Support message us immediately to keep your possible losses to a minimum. You could lose all the money in your account(s). If you tell us within two (2) business days after learning of the loss or theft of your account access device, or after learning of any other unauthorized transfers from your account involving your account access device, you can lose no more than $50 if Electronic Fund Transfers are made without your permission. For these transactions, if you DO NOT tell us within two (2) business days after learning of the loss, theft or unauthorized use, and we can establish that we could have prevented the unauthorized transfer(s) if you had told us in time, you could lose as much as $500. Also, if your periodic account statement shows unauthorized transfers and you DO NOT tell us within sixty (60) days after the statement was delivered to you, you may not get back any money you lose after the sixty (60) day period if we can prove that we could have prevented the unauthorized transfer(s) if you had told us in time. If an extenuating circumstance (such as extended travel or hospitalization) prevents you from promptly notifying us of a suspected lost or stolen access device or of any other suspected unauthorized transfer(s), the time periods specified in this Section B may be extended for a reasonable period.
Include our contact information on your customer support page.
"Bank services are provided through our banking software provider, Synapse. To report a complaint relating to the bank services, email [email protected]”
Please include the following transaction and account notifications.
Enable your Users to view and print a transaction receipt immediately after creating a transaction form that contains:
- Full details of the scheduled transaction(s) (i.e. payment amount and date, and, if recurring transactions:, the frequency of transactions, start date, end date or number of transactions and disclosure);
- A transaction number for any transaction processed as part of the scheduled payment(s) when it was entered;
- Contact information for your support and Synapse ([email protected]); and
- Information on how to cancel transaction (ex: “Click here to cancel transaction.”)
If recurring transaction, include the following text on the confirmation screen, with “click here” as a hyperlink to the page where the customer may cancel the transaction:
“To cancel this transaction, click here. This is an authorized recurring debit from your account if you would like to cancel future payments, please email us at <Platform email address> with at least 3 business days notice.”
Email Notifications and Receipts
- At the following times, email a transaction receipt (as detailed above) to Users and keep copies of the emails for 2 years after the transaction was settled:
- After each transaction is created;
- Before a new transactions is created if part of recurring transactions; and
- After funds have settled into a User Deposit Account (if applicable) with information on how to access those funds on your application
Changes to Scheduled Transactions
- Email Users in advance of any changes to a scheduled transaction amount, frequency or timing.
Email Users monthly statements of their transaction history.
Platform will include the following language in its agreement with Users for resolving errors and associated time periods, relating to transactions for Users not opening Deposit Accounts.
Errors or Questions about Transactions
Please contact us by emailing us at <Insert Platform Email> (1) if you believe a transaction receipt or a statement is wrong, or (2) if you need more information about a transaction on the receipt or statement. For consumer accounts, we must hear from you no later than sixty (60) days after we sent you the first statement on which the error or problem appeared. For business accounts, we must hear from you within one (1) business day of us sending you a receipt. Your inquiry must include: (x) your name, email associated with your account, and your account number (if available); (y) a description of the error or the transaction you are unsure about, and a clear explanation of why you believe there is an error or why you need more information; and (z) the dollar amount of the suspected error. If you tell us orally, we may require that you send us your inquiry via email within ten (10) business days.
Ten-Day Time Period: <Insert Platform Name> will investigate promptly and, except as otherwise provided in this paragraph, shall determine whether an error occurred within 10 business days of receiving a notice of error. <Insert Platform Name> shall report the results to the consumer in writing within three business days after completing its investigation. <Insert Platform Name> shall correct the error within one business day after determining that an error occurred.
Forty Five-Day Time Period:
If <Insert Platform Name> is unable to complete its investigation within 10 business days, <Insert Platform Name> may take up to 45 days from receipt of a notice of error to investigate and determine whether an error occurred, provided <Insert Platform Name> does the following: (1) Provisionally credits the consumer's account in the amount of the alleged error (including interest where applicable) within 10 business days of receiving the error notice. <Insert Platform Name> need not provisionally credit the consumer's account if:*
- <Insert Platform Name> does not receive written confirmation within 10 business days of an oral notice of error; or
- The alleged error involves an account that is subject to Regulation T (Securities Credit by Brokers and Dealers, 12 CFR part 220)
(2)Informs the consumer, within two business days after the provisional crediting, of the amount and date of the provisional crediting and gives the consumer full use of the funds during the investigation;
(3) Corrects the error, if any, within one business day after determining that an error occurred; and
(4) Reports the results to the consumer within three business days after completing its investigation (including, if applicable, notice that a provisional credit has been made final).
(3) Extension of time periods. The time periods described above may be extended as follows:
- Extension of Ten-Day Time Period - The time limit for resolution is extended to 20 business days in place of 10 business days if the notice of error involves an electronic fund transfer to or from the account within 30 days after the first deposit to the account was made; or
- Extension of Forty Five-Day Time Period - The time limit for resolution is extended to 90 days in place of 45 days for completing an investigation, if a notice of error involves an electronic fund transfer that occurred within 30 days after the first deposit to the account was made.
You must provide a link in your website footer and/or application with a landing page substantially similar to http://synapsefi.com/legal that includes links to all of the applicable legal agreements, including:
- Deposit Agreement
- Terms of Service