Free Declaration - District Court of Delaware - Delaware

Case 1:04-cv—00858-SLR Document 402-2 Filed 11/14/2005 Page 1 014

A ee— Case 1 :04-cv—00858-SLR Docu mentA402-2 Filed 1 1/14/2005.t Page 2 of.4
2 0 0 5 A
A Complete GuideTo Rules
Regulations Governing the
A CH Network
Copyright 2005 by the Nat\i:n;l§]u;ol:;f;‘fgeanng House Association
Printed in thc United States of America
|3665 Dulles Technology Drive, Suite 300
LML-EP-055337

Case 1 .04-cv—00858-SLR Docu ment 402-2 Fr led 1 1/14/2005 Page 3 of 4
ARTICLE THREE 2005 OPERA 77NG RULES
SECTION 3.7 Obligations of Origjnators of ARC SUBSECTION 3.7.5 Destruction of Source Docrmient
Entries ` O
. The source document to which the ARC entry relates must
SUBSECT ION 3.7.1 Notice Obligation be destroyed within fourteen days of the Settlement Date
`V · ~ of the entry.
The Originator must, in advance of receiving from the
Receiver each source document used as the basis for the SUBSECTION 3.7.6 Capture of MICR Information
origination of an ARC‘entry, provide the Receiver with
notice that clearly and conspicuously states that receipt of During initial processing of an ARC entry, the Originator
the Receiver’s source docurrrent wrll authorize an ACH may not key-enter the routing number, account number, or -
debit entry to the Receivcr’s account in accordance with check serial number from the Receiver’s source '
the terms of the source document. lf the Originator has document. An Originator may, however, key-enter such
received notice in accordance with the reasonable l information to correct errors relating to MICR misreads,
procedures established by the Originator that the receipt misencoding, or processing rejects.
of the check does not authorize an ACH debit entry, then
receipt of a check by the Originator does not authorize an SECTION 3.8 Obligations of Originators of POP
ACH debit entry to the account on which the check is Entries
drawn. -
SUBSECTION 3.8.1 Source Documents
SUBSECYION 3.7.2 Source Documents
For a POP entry, a check or sharedrah provided by the
For an ARC entry, a check or sharcdratt provided to the Receiver at the point—of-purchase must be used by the
Originator by the Receiver via, the U.S. mail or at a Originator as a source document for the Receiver’s
dropbox location must be used by the Originator as the routing number, account number, and check serial
source document for the Receiver’s routing number, nurrrber. The source document must thenbe voided bythe
account number, check serial number, and dollar amount.- Originator. Only a check or sharedraft that contains a pre-
To be used as the source document for an ARC entry, a printed serial number and that is drawn on a Consumer
check or sharedrah must (1) contain a pre—prirrted serial Account may be used as a source document for this type
number, (2) be drawn on a Consumer Account, and (3) be of transaction.
completed and signed by the Receiver. _
For POP entries, the following may not be used as source
The following may not be used as the source document for documents: (l) checks drawn on corporate or business
ARC entries: (l) checks drawn on corporate or business deposit accounts, (2) third-party checks, (3) credit card
accounts, (2) third-party checks, (3) demand drafts and checks, (4) obligations of a financial institution (e.g.,
third-party drahs that do not contain the signature of the uavclefschecks, cashier’s checks, official checks, money
Receiver, (4) credit card checks, (5) obligations of a orders, etc.), (5) checks drawn on the Treasury of the
financial institution (e.g, travelers checks, cashier’s United States, aFederal Reserve Bank, oraFederal Home
checks, ofiicial checks, money orders, etc.), (6) checks Loan Bank, (6) checks drawn on a state or local
drawn on the Treasury of theUnited States, a Federal government, or (7) checkspayableinan1edirunotlrer.than
Reserve Bank, or a Federal Home Loan Bank, (7) checks United States currency. For POP entries, a previously
i drawn on a state or local govemmcnt, or (8) checks voided check or sharedrail that has been used by the
payable in a rnediurn other than United States currency. Receiver for a prior POP entry, may not be used as a
source document for this type of transaction.
SUBSECT ION 3.7.3 Copy of Source Document
SUBSECTION 3.8.2 Capture of MICR information
. The Originator must retain a reproducible, legible, image,
microfilm, or copy of the front of the Receiver‘s source The Originator may not key-enter the routing number,
document for each ARC entry for two years from the account number, or check serial number from the
Settlement Date ofthe ARC entry. At the request ofthe Receiver’s source document.
ODFI, the Originator must provide a copy of the front of
the source document to the ODFI for its use or for the use SUBSECTION 3.8.3 Receipts
of an RDFI requesting such information pursuant to
subsection 2.9.3.2 (Copy of Source Document). An Originator mrrst provide to each Receiver a receipt
containing the following information with respect to each
SUBSECT ION 3.7.4 Source Document Will Not Be POP entry to the Receiver’s account:
Presented for Pay;r_;_ent ·
(a) Originator name (merchant)
The source document to which the ARC entry relates rrray (b) company (merchant)/third-party service
not be used by the Originator as a check to obtain provider telephone number;
payment. (c) date of transaction;
(d) transaction amount;

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Case A1 .04-cv—00858-SLR Docu merit 402-2 F1 led 1 1/14/2005 Page 4 of 4 .
2005 OPERA TING RULES _ ARIYCLE THREE
(e) source document check serial number; protected by security practices and procedures that
(f) merchant number (or other unique number that include, at a minirmrm, adequate levels of (1) physical
identifies the location of the transaction); security to protect against theft, tampering, ordarnage, (2)
(g) Terminal City; and personnel and access controls to protect against
(h) Temrinal State. unauthorized access and use, and (3) network security to
ensure secure capture, storage, and distribution.
The National Association strongly recommends, but these .
rules do not require, that the Originator also provide the SECTION 3.10 Obligations of Originators of
following information on the receipt provided to the Telephone-Initiated Entries
Receivett ‘
SUBSECTION 3.10.1 Verification of Receiver Identig
(a) merchant address;
(b) merchant identification number; Each Originator that initiates TEL entries must enploy
(c) - Receiver’s financial institution routing number; commercially reasonable procedures to verify the identity
(d) - Receiver’s truncated account number; of the Receiver.
(e) Receiver‘s truncated identification number; and _
» (f) transaction reference number. SUBSECTION 3.10.2 Verification of Rouggg Numbers
Note: ’I`he Receiver’s complete account number and Each Originator that initiates TEL entries must use
complete identification number are not permitted to be commercially reasonable procedures to verify that routing
placed on the receipt. numbers are valid. ‘
SECTION 3.9 Obligations of Originators o1' Internet- 0 SECTION 3.11 Payment to ODFI
Initiated Entries _
‘ Each Originator that utilizes a Third-Party Sender to
SUBSECTION 3.9.1 Fraud Detection Systems authorize an ODFI to transmit credit or debit entries
agrees to make payment to the ODFI for any such credit
Each Originator originating WEB entries must employ a entries originated and for any debit entries retumed by the
commercially reasonable fraudulent transaction detection RDF1 to the extent that the ODFI does not receive
system to screen each entry. payment from the Third-Party Sender.
. SUBSECTION 3.9.2 Verification of Routing·Numbers SECTION 3.12 Record of Authorization
¤ Each Originator that originates WEB entries must use An Originator must retain the original or a microfilm or
` commercially reasonable procedures to verify that routing microfilm-equivalent copy of each authorization of a
numbers are valid. Receiver for two years fiom the temiination or revocation
of the authorization. In the case of TEL entries, the
O [S UBSECT ION 3.9.3 Verification ot Receiver ’s Identity Originator must retain the original or a microfilm or
microfilm-equivalent copy of the written notice or the
Each Originator thatoriginates WEB entries must employ original or a duplicate tape recording of the oral
g commcrcialbr reasonable methods of authentication to authorization for two years from the date of the
· verify the identity ofthe Receiver.] authorization. At the request of its ODFI, the Originator
must provide the original or copy of the authorization to
SUBSECYION 3.9.4 Securig of Intemet Session the ODFI for its use or for the me of an RDFI requesting
Y the infomtation pursuant to subsection 4.1.1 (Right to
Each Originator that originates WEB entries must Information Regarding Entries). This section 3.12 does
- establish a secure Internet session with each Receiver not apply to SHR or MTE entries if the ODFI and RDFI
L utilizing a commercially reasonable security technology are parties to an agreement (other than these rules) for the
, providing a level of security that, at a minimum, is provision of services relating to SHR or MTE entries. -
g equivalent to 128-bit encryption technology prior to the
? Receiver's key entry and through transmission to the
Q Originator of any banking infomration, including, but not K
g limited to, the Receiver's routing number, account `
* number, and personal identification number (PIN) or other _
; identification symbol.
SUBSECTION 3.9.5 WEB Annual Audit ·
r Each Originator that originates WEB entries shall conduct · I ‘
_ or have conducted annual audits to ensure that the V
l financial information it obtains fiom Receivers is ·
-
O Approved November 9, 2004; Eybctive March I8, 2005
<> Approved December 2, 2003; Ejizczive December I0, 2004 OR I 5
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