What is the requirement for the Originator of a Single-Entry TEL regarding consumer authorization?

What is the requirement for the Originator of a Single-Entry TEL regarding consumer authorization?

• A. Record the authorization
• B. Notify the consumer via mail
• C. Create a digital signature
• D. Obtain a second confirmation

Answer: (A)

The requirement for the Originator of a Single-Entry TEL (telephone-initiated) transaction is to record the authorization. This is vital because it serves as proof that the consumer has consented to the transaction. When using TEL transactions, which are initiated over the phone, the Originator must obtain explicit authorization from the consumer before processing the transaction. This authorization must be documented to provide a clear record in case of disputes or inquiries regarding the transaction. The recording of the authorization ensures compliance with the NACHA Operating Rules, which stipulate that Originators must maintain records of consumer authorizations for a specific period. This compliance is critical for the integrity and trustworthiness of ACH transactions, as it protects both the consumer's rights and the Originator's interests in case of chargebacks or other issues related to the transaction. Each of the other choices does not fully align with the specific requirements for TEL transactions under NACHA guidelines. While notification, digital signatures, and additional confirmations may have their place in different contexts or transactions, the definitive requirement in this instance focuses on the need to record the consumer's authorization for the Single-Entry TEL.

The requirement for the Originator of a Single-Entry TEL (telephone-initiated) transaction is to record the authorization. This is vital because it serves as proof that the consumer has consented to the transaction. When using TEL transactions, which are initiated over the phone, the Originator must obtain explicit authorization from the consumer before processing the transaction. This authorization must be documented to provide a clear record in case of disputes or inquiries regarding the transaction.

The recording of the authorization ensures compliance with the NACHA Operating Rules, which stipulate that Originators must maintain records of consumer authorizations for a specific period. This compliance is critical for the integrity and trustworthiness of ACH transactions, as it protects both the consumer's rights and the Originator's interests in case of chargebacks or other issues related to the transaction.

Each of the other choices does not fully align with the specific requirements for TEL transactions under NACHA guidelines. While notification, digital signatures, and additional confirmations may have their place in different contexts or transactions, the definitive requirement in this instance focuses on the need to record the consumer's authorization for the Single-Entry TEL.