ACH PAYMENT AUTHORIZATION SERVICES
ACH Payment authorization services are designed to reduce the possibility that unauthorized ACH transactions will post to your account(s). ACH Payment Authorization has two (2) services that you can use: ACH Positive Pay and ACH Debit Block.
APP allows you to tell us which Debit Entries to allow to post to your Bank account and which Debit Entries to block and return. You may tell us which Debit Entries to block and return by establishing Payment Rules, as further described below, or through a decision made by one of your company’s Business Banking Authorized Users. APP may not be used to block or return Excluded Items, as defined below. If you maintain more than one account with us, you do not need to select the same option for each account; however, an account can be set up for only one of the above Service options. If you elect to use APP for reviewing and approving or returning Debit Entries or for reporting, you must also use Business eBanking and comply with the Terms and Conditions for that Service.
APP and Payment Rule Authorization
The interactive features of APP give you the ability to automatically approve some incoming Debit Entries, while identifying other Debit Entries as suspect transactions (each a “Suspect Entry”). This is accomplished through the creation of Payment Rules. Payment Rules are criteria that you set against which each Debit Entry that is presented for posting to the specified Account is evaluated to determine whether the Debit Entry should be allowed to post to the Account automatically or whether it should be presented to you as a Suspect Entry. The Payment Rule criteria must include the Originating Company ID number, and can also include a dollar amount range, an expiration date, the frequency of the Debit Entry and the number of its occurrences. You may create Payment Rules within APP at any time. You may also create or change a Payment Rule within APP at the time a Suspect Entry is presented for decision. Any new Payment Rules, changes to existing Payment Rules or the deletion of existing Payment Rules will take effect for the Debit Entries presented on the next Banking Day, Bank strongly suggests requiring secondary approval from an Authorized User.
If a pending Debit Entry meets all of the criteria of your Payment Rules for your applicable Account, the Debit Entry will post to your Account on the Settlement Date. If a pending Debit Entry does not match all of the criteria of your Payment Rules for the account, or if no Payment Rules have been created, the incoming Debit Entry will be identified as a Suspect Entry and will be reported to you to approve or return the Suspect Entry via Business Banking. If you instruct us to return a Suspect Entry, or if you do not instruct us what to do by the applicable deadline and you have selected a ‘Return’ default instruction for Suspect Entries, we will return it and it will not post to your account. If you instruct us to pay a Suspect Entry, or if you do not instruct us what to do by the applicable deadline and you have selected a ‘Pay’ default instruction for Suspect Entries, we will post the Debit Entry to your account on the day the Suspect Entry is presented to you. If you fail to fund the account on the same Banking Day that we post a Debit Entry, we may return one or more of the Debit Entries.
You may contact us to change the default instruction on any of your Accounts. We will use reasonable efforts to implement your new default instruction within five (5) Banking Days of receiving all details required to carry out the request; however, you must check the Account Status Report within APP to verify that the default instruction has been changed.
Return reason code R29 (Corporate Customer Advises Not Authorized) is used for all returned Debit Entries.
If our primary means of communication with you is unavailable for any reason and we are not able to present a Suspect Entry, we will contact you to make alternative arrangements. If your primary means of communication with us is unavailable for any reason you must notify us immediately in order to make alternative arrangements. If we receive conflicting instructions from you, we may follow the most recent instruction received, or, at our option, we shall be entitled to return the Debit Entry, without liability, until the conflict is resolved to our satisfaction.
Limitation of Liability
In addition to the limitations of liability stated elsewhere in this Agreement, our liability to you in connection with this Service is limited as follows: We will pay or return Debit Entries and Suspect Entries in accordance with these Terms and Conditions, which shall be deemed to be the exercise by us of ordinary care, whether or not the Debit Entry or Suspect Entity has been actually authorized by you. If we pay a Debit Entry or Suspect Entry that should have been returned because of our failure to comply with these Terms and Conditions, then our liability shall be limited to the lesser of (a) the amount of said Debit Entry or Suspect Entry and (b) your actual, direct losses from such payment; provided that we will have no liability to you to the extent that such payment (i) results from your failure to exercise ordinary care or (ii) pays an obligation you owe to a third party or (iii) you otherwise receive a benefit from such payment. If we return a Debit Entry or Suspect Entry that should have been paid because of our failure to comply with these Terms and Conditions, our liability shall be limited to your actual, direct losses from such return; provided that we will have no liability to you if such Debit Entry or Suspect Entry was not authorized by you at the time of its origination, you did not have sufficient available funds in your account to pay the Debit Entry or Suspect Entry, we are required by law to return the Debit Entry or Suspect Entry or we have a right to return the Debit Entry or Suspect Entry for any other reason under the terms of this Agreement.
With ACH Block, all Debit and Credits Entries are blocked from posting to your account, other than Excluded Items. You may have the option to block ACH Credits, or ACH debits or both. ACH Block does not allow you to review and approve or return Entries or provide for Payment Rules. We will not accept telephone instructions to approve Entries for posting when the account is set up with ACH Block and we shall not be liable for any Debit Entries that are returned and thus unpaid due to implementation of the ACH Block feature.
ACH Converted Check Entries
APP and Debit Block also allow you to establish a default instruction for converted check Entries. You can use either APP or Debit Block to screen converted check Entries (such as ARC, BOC, RCK, and POP standard entry class (SEC) codes), or you can have converted check Entries bypass APP or Debit Block to be screened through our Positive Pay Service for checks. Your default setting for screening or bypassing converted check Entries will be determined during implementation and can be changed by contacting your Bank representative. Your default setting for screening or bypassing converted check Entries cannot be changed by you within APP or within Debit Block reporting via APP. If you choose to monitor converted check Entries through our Positive Pay Service for checks, you must comply with the Terms and Conditions for that Service.
APP and Debit Block cannot be used to monitor or block the following items (“Excluded Items”):
· Bank ACH settlement Entries if you are originating ACH Entries. This would include ACH return settlement Entries.
· Reversing Entries received to correct erroneous Entries.
Positive Pay Service
In consideration of the promises, covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Bank and Customer agree as follows:
1. The terms used herein shall have the following meaning:
a) “Banking Day” shall mean the part of a day on which Bank is open to the public for carrying on
substantially all of Bank’s banking functions, except Saturday or Sunday.
b) “Check Information” shall mean such information identifying an Issued Check as Bank may from
time to time require (which may include, without limitation, account number, serial number, payee issue date and amount).
c) “Check Register” shall mean a register maintained in Bank’s check reconciliation system containing Check Information which has been transmitted by Customer to Bank and inputted by Bank into such system.
d) “Issue Check” shall mean any check drawn by Customer on an account for which Bank
provides the Positive Pay Service.
e) “Presented Check” shall mean any check presented for payment at Bank which appears to have been drawn by Customer on Bank.
2. Prior to Cutoff Time on any day (whether or not a Banking Day for Bank) during which Customer issues any Issued Check, Customer shall transmit Check Information to Bank in such format as Bank may from time to time require.
a) Upon presentment of any Presented Check at Bank, Bank shall compare the Check Information
for such Presented Check to the Check Information contained in the Check Register.
b) If the Check Information for such Presented Check matches the Check Information for an Issued Check listed in the Check Register, such Presented Check shall be (i) conclusively presumed to be such Issued Check and (ii) authorized by Customer to be paid by Bank without further examination by Bank of such Presented Check.
c) If the Check Information for such Presented Check does not match the Check Information for any Issued Check listed in the Check Register, Customer shall review such Presented Check for evidence of MICR incorrect encoding or misreading. If Customer determines that there has been MICR encoding error or misreading with respect to such Presented Check, Customer shall after adjustment re-compare such Presented Check to the Check Register as described above, disregarding such MICR encoding errors or misreading. Customer shall notify Bank with decision to pay such check by Cutoff Time.
d) Nothing is this Agreement shall affect Bank’s right to return any Presented Check to the depositary bank (i) pursuant to any controlled disbursement agreement by and between Customer and Bank, or pursuant to any other agreement by and between Customer and Bank, (ii) if the account on which such Presented Check was drawn does not contain sufficient available funds to pay such Presented Check, or (iii) if Bank in its sole discretion determines that such Presented Check is not properly payable.
4. If the Customer desires to stop payment of any Issued Check listed in the Check Register, Customer may issue a stop-payment order with respect to such Issued Check in accordance with Bank’s usual stop-payment procedures. As an alternative, Customer may submit a request to Bank to delete such Issued Check from the Check Register, and Bank shall input such deletion into the Check Register when Bank next inputs Check Information respecting Customer’s Issued Checks into the Check Register. Customer acknowledges that issuance of a stop payment order may be more expeditious than a request to delete an Issued Check from the Check Register.
5. Provided that the Bank has exercised ordinary care and acted in good faith, the Bank shall not be responsible for any liability, loss, or damage resulting from (i) payment in accordance with the provisions of this Agreement of any Issued Check or Presented Check which is forged, altered, or unsigned or which bears the forged or unauthorized signature of Customer, (ii) return of any Issued Check or Presented Check to the depository bank in accordance with the provisions of this Agreement, or (iii) any delay in the performance of or failure to perform its obligations under this Agreement which is caused by an act of God, fire or other catastrophe, electrical or computer failure, or, without limiting the generality of the foregoing, any other cause beyond Bank’s control.
6. Any schedule, information sheet, specification sheet or other applicable document executed by Customer is made a part hereof.
7. For services rendered by the Bank, the customer agrees to pay the Bank for its services under this agreement.
8. Customer agrees to be bound by all of the terms and conditions in the (Bank) Disclosures and Rules, a copy of which has been provided.
Payee Positive Pay
With this Service, you can elect to have us compare the payee information that you provide to us with the payee information on the check, in addition to the serial number and amount, prior to the payment of any checks presented against your designated Account. We will still compare the presented checks with your Issue Data as described above, but your Issue Data must include the payee information in accordance with the formats defined by us. With this option, we will compare the payee name that should appear on the check as indicated in your Issue Data, with the payee name that appears on the check presented for payment against your designated Account. If either the payee information or the serial number and amount do not match, then the presented check will be an Exception Check and we will make available to your Authorized Person data and images of that Exception Check via our Business eBanking Service. If you select this payee option, you are still obligated to review the Exception Check data and images, send your Issue Data in compliance with the Documentation, and provide timely instructions to us on whether to pay or return any Exception Checks as indicated above, if those instructions are different from your default instructions. Failure to provide timely instructions as indicated above will result in the payment or return of the Exception Checks, in accordance with your default instructions.