Can I Electronically Recover State Authorized NSF Fees?

Yes, you can, but you must have Authorization from the checkwriter before you can do so.  Unfortunately, there doesn't seem to be a simple layman's definition of what constitutes 'Authorization' and to make matters worse, the definition of 'Authorization' seems to change depending upon who you last spoke with or who's website you just visited.

The legal definition of "Written Authorization for Return Fee", according to NACHA, is as follows.

From OR2 Subsection 2.1.2

1. In the case of debit entries to a consumer account, the authorization must be in writing and signed or similarly authenticated by consumer.
2. The authorization process must evidence both the consumers identity and his assent to the authorization.
3. The authorization also must be readily identifiable as an authorization, must clearly and conspicuously state its term, and authorization must provide that the receiver may revoke the authorization only by notifying the originator in the manner specified in the authorization.

From OR 13 section 3.4

1. An originator must provide each receiver with an electronic or hard copy of the receivers authorization for all debits entries to be initiated to a consumers account.

As with any rule, interpretation is likely to be different from one company to another and Check Assist is not going to try to project an interpretation one way or the other.  Watching the industry and the companies that are doing RCK, it appears that the general approach is to:

• Have notice posted at the point of sale that informs the consumer (checkwriter) that their check as well as any fee's, will be electronically represented should it be returned NSF, and
• Stamp the back of the checkwriters check with verbiage that is similar to the following:

  "If this check is returned unpaid, I authorize an electronic debit of my account for the check amount and all (applicable) service fees, taxes and related expenses permitted by law."  X_________________________  To revoke this authorization call (888) 000-0000

   

• And then have the checkwriter sign the appropriate area, signifying that they agree. 

It is important that you understand that this is what we see happening in the industry and that Check Assist is not endorsing, or withholding its endorsement, on this approach.  All we have to say is that It seems logical to us, and it seems to be working for those who embrace the approach.

As of November 1, 2000 three states, New York, Rhode Island, and South Carolina, had not adopted the 1990 version of Revised Article 4 of the Uniform Commercial Code.  RDFIs in these states my return Re-presented check entries within time frames allowable by the ACH Rules regarding such entries.  Originators should consult with legal counsel regarding the appropriateness of using the Re-presented check application prior to transmitting this type of entry to states that have enacted statutes requiring RDFIs to return all canceled checks to the account holder in the periodic statement for certain types of accounts.