02 Oct ACH Authorization Helps Avoid Abuse
Our ACH Authorization Approach Avoids Abuse and Promotes Cooperation
ACH payments deposit funds into a borrower’s banking account. ACH authorizations also give the “authorization” to electronically debit repayment from a checking or savings account when a loan payment is due. Since the process is electronic, the convenience makes it a preferred choice for a majority of borrowers.
ACH authorizations require the customer’s signature. A signature! Whether electronically or on paper, a signature indicates the customer understands the ACH payment and authorization process, the exact amount to be deposited or debited and the date the ACH transaction will occur among other things.
Despite its convenience and popularity, abuse has caused the industry to take a hard look at ACH authorizations. There are mandated and common sense rules governing ACH transactions and Centrinex follows them to the letter in order to protect our call center clients.
When a customer applies for a loan, Centrinex ensures authorizations are in place and that applicants fully understand ACH authorizations. This is key for our call center clients because the consequences can be severe if proof of the signed authorization cannot be produced.
Under the law, a customer’s request to stop the ACH payment from being debited from an account must be honored. If the lender still attempts to take money out of their customer’s account after the request is given, it then turns the ACH into an unauthorized payment.
It’s futile to continue attempting an ACH debit day after day, racking up bank fees, hoping at some point that sufficient funds will exist to cover it. It upsets the customer and frankly is counterproductive as the bank continues to earn overdraft fees on your ACH attempts. In addition, this is a practice that led to industry scrutiny, and it’s not good for business.
Centrinex’s approach to ACH authorization avoids abuse and promotes cooperation between borrower and lender. It is our policy to work on behalf of our call center clients to ensure repayments are received promptly by obtaining signed ACH authorizations from informed borrowers.