ACH pulls for irregular dollar amounts

21 Replies

Been using ACH pulls for rent payment through eRentPayment.com and love it, but only works if the dollar amount stays the same each payment.

Looking for suggestions on controlling ACH payments for reoccurring bills with a non-regular amounts. 

How do you automate tenant paying a sewer Bill for example?  (around $50 quarterly that can only be in owner's name)

I'd like to setup something similar to how utility bills can be deducted from the customer's account even though the dollar amount can change each bill.

Originally posted by @Michael Herr :

Been using ACH pulls for rent payment through eRentPayment.com and love it, but only works if the dollar amount stays the same each payment.

Looking for suggestions on controlling ACH payments for reoccurring bills with a non-regular amounts. 

How do you automate tenant paying a sewer Bill for example?  (around $50 quarterly that can only be in owner's name)

I'd like to setup something similar to how utility bills can be deducted from the customer's account even though the dollar amount can change each bill.

 Hi Michael, This is Rick with eRentPayment and I believe we resolved this through the email you sent us directly.  We appreciate the feedback and are looking at additional ways to automate the utility payment process to allow you to specify additional amounts for their recurring payment.  Thanks!

I'm wanting to have a tenant pre-authorize ACH pulls for the things that aren't the same dollar amount every month.

For example, if tenant incurred late fees, a city fine, or a sewer bill. I could login to an account online, setup the draw to happen 10 days in the future and send them a bill with that amount, but let them know it will be auto-deducted from thier checking account on the "due date" that the ACH pull is scheduled.

I want inaction on the part of the tenant to result in a payment happening.

When I get busy/lazy/forget to open my personal credit card or utility bills, they are still paid in full on the due date.

I want to be able to offer the same type of service to my tenants.

@Michael Herr "want to be able to offer the same type of service to my tenants."

Aren't you basically asking your tenant to give you a "blank check"?   

I'm not sure I would consider that a "service", if I was in the tenant's shoes...  I'd minimally want to see some upper limits placed on that blank check - depending on what sort of balance the tenant keeps in their account, I could easily see this leading to bounced draws - then the tenant is likely stuck with the overdraft fee.

Originally posted by @Michael Herr :

I'm wanting to have a tenant pre-authorize ACH pulls for the things that aren't the same dollar amount every month.

For example, if tenant incurred late fees, a city fine, or a sewer bill. I could login to an account online, setup the draw to happen 10 days in the future and send them a bill with that amount, but let them know it will be auto-deducted from thier checking account on the "due date" that the ACH pull is scheduled.

I want inaction on the part of the tenant to result in a payment happening.

When I get busy/lazy/forget to open my personal credit card or utility bills, they are still paid in full on the due date.

I want to be able to offer the same type of service to my tenants.

 What can be done is an invoicing system. Whereas, you create a charge, for late fees, utility charges, some fee, ect, and the system send that invoice to the tenant with a "link". The tenant clicks the link and page appears in the browser with the correct charge. They click the "pay now" button and you are paid by ACH. Is this what you need?

Originally posted by @Jeff Gates :
Originally posted by @Michael Herr:

I'm wanting to have a tenant pre-authorize ACH pulls for the things that aren't the same dollar amount every month.

For example, if tenant incurred late fees, a city fine, or a sewer bill. I could login to an account online, setup the draw to happen 10 days in the future and send them a bill with that amount, but let them know it will be auto-deducted from thier checking account on the "due date" that the ACH pull is scheduled.

I want inaction on the part of the tenant to result in a payment happening.

When I get busy/lazy/forget to open my personal credit card or utility bills, they are still paid in full on the due date.

I want to be able to offer the same type of service to my tenants.

 What can be done is an invoicing system. Whereas, you create a charge, for late fees, utility charges, some fee, ect, and the system send that invoice to the tenant with a "link". The tenant clicks the link and page appears in the browser with the correct charge. They click the "pay now" button and you are paid by ACH. Is this what you need?

 No. 

I want to ACH pull the money without the tenant doing any action at all, except the initial "ezpay" program signup.

I heard back from eRentPayment.com by email, they said they can do this for me.

Originally posted by @Michael Herr :
Originally posted by @Jeff Gates:
Originally posted by @Michael Herr:

I'm wanting to have a tenant pre-authorize ACH pulls for the things that aren't the same dollar amount every month.

For example, if tenant incurred late fees, a city fine, or a sewer bill. I could login to an account online, setup the draw to happen 10 days in the future and send them a bill with that amount, but let them know it will be auto-deducted from thier checking account on the "due date" that the ACH pull is scheduled.

I want inaction on the part of the tenant to result in a payment happening.

When I get busy/lazy/forget to open my personal credit card or utility bills, they are still paid in full on the due date.

I want to be able to offer the same type of service to my tenants.

 What can be done is an invoicing system. Whereas, you create a charge, for late fees, utility charges, some fee, ect, and the system send that invoice to the tenant with a "link". The tenant clicks the link and page appears in the browser with the correct charge. They click the "pay now" button and you are paid by ACH. Is this what you need?

 No. 

I want to ACH pull the money without the tenant doing any action at all, except the initial "ezpay" program signup.

I heard back from eRentPayment.com by email, they said they can do this for me.

 Tenant can easily block that (even 60days latter) and then you have a NSF charge and a big headache. Good luck with that.

Originally posted by @Michael Herr :
Originally posted by @Jeff Gates:
Originally posted by @Michael Herr:

I'm wanting to have a tenant pre-authorize ACH pulls for the things that aren't the same dollar amount every month.

For example, if tenant incurred late fees, a city fine, or a sewer bill. I could login to an account online, setup the draw to happen 10 days in the future and send them a bill with that amount, but let them know it will be auto-deducted from thier checking account on the "due date" that the ACH pull is scheduled.

I want inaction on the part of the tenant to result in a payment happening.

When I get busy/lazy/forget to open my personal credit card or utility bills, they are still paid in full on the due date.

I want to be able to offer the same type of service to my tenants.

 What can be done is an invoicing system. Whereas, you create a charge, for late fees, utility charges, some fee, ect, and the system send that invoice to the tenant with a "link". The tenant clicks the link and page appears in the browser with the correct charge. They click the "pay now" button and you are paid by ACH. Is this what you need?

 No. 

I want to ACH pull the money without the tenant doing any action at all, except the initial "ezpay" program signup.

I heard back from eRentPayment.com by email, they said they can do this for me.

 ACH pulls are dangerous. Don't belive me, contact these folks. http://www.achrulesonline.org/

Originally posted by @Jeff Gates :
Originally posted by @Michael Herr:
Originally posted by @Jeff Gates:
Originally posted by @Michael Herr:

I'm wanting to have a tenant pre-authorize ACH pulls for the things that aren't the same dollar amount every month.

For example, if tenant incurred late fees, a city fine, or a sewer bill. I could login to an account online, setup the draw to happen 10 days in the future and send them a bill with that amount, but let them know it will be auto-deducted from thier checking account on the "due date" that the ACH pull is scheduled.

I want inaction on the part of the tenant to result in a payment happening.

When I get busy/lazy/forget to open my personal credit card or utility bills, they are still paid in full on the due date.

I want to be able to offer the same type of service to my tenants.

 What can be done is an invoicing system. Whereas, you create a charge, for late fees, utility charges, some fee, ect, and the system send that invoice to the tenant with a "link". The tenant clicks the link and page appears in the browser with the correct charge. They click the "pay now" button and you are paid by ACH. Is this what you need?

 No. 

I want to ACH pull the money without the tenant doing any action at all, except the initial "ezpay" program signup.

I heard back from eRentPayment.com by email, they said they can do this for me.

 ACH pulls are dangerous. Don't belive me, contact these folks. http://www.achrulesonline.org/

 I checked the NACHA rules and I don't see any restrictions on a variable amount recurring payment authorization.  I agree that a maximum should be specified though.  I will be checking into this more on Monday to confirm but I believe a variable recurring payment authorization will work as suggested before.  Thanks.

Originally posted by @Rick S. :
Originally posted by @Jeff Gates:
Originally posted by @Michael Herr:
Originally posted by @Jeff Gates:
Originally posted by @Michael Herr:

I'm wanting to have a tenant pre-authorize ACH pulls for the things that aren't the same dollar amount every month.

For example, if tenant incurred late fees, a city fine, or a sewer bill. I could login to an account online, setup the draw to happen 10 days in the future and send them a bill with that amount, but let them know it will be auto-deducted from thier checking account on the "due date" that the ACH pull is scheduled.

I want inaction on the part of the tenant to result in a payment happening.

When I get busy/lazy/forget to open my personal credit card or utility bills, they are still paid in full on the due date.

I want to be able to offer the same type of service to my tenants.

 What can be done is an invoicing system. Whereas, you create a charge, for late fees, utility charges, some fee, ect, and the system send that invoice to the tenant with a "link". The tenant clicks the link and page appears in the browser with the correct charge. They click the "pay now" button and you are paid by ACH. Is this what you need?

 No. 

I want to ACH pull the money without the tenant doing any action at all, except the initial "ezpay" program signup.

I heard back from eRentPayment.com by email, they said they can do this for me.

 ACH pulls are dangerous. Don't belive me, contact these folks. http://www.achrulesonline.org/

 I checked the NACHA rules and I don't see any restrictions on a variable amount recurring payment authorization.  I agree that a maximum should be specified though.  I will be checking into this more on Monday to confirm but I believe a variable recurring payment authorization will work as suggested before.  Thanks.

 I will show you the data from Quora. It can be found many, many other places. Some of it is the process defined in Federal Reserve Regulation E section 205.11

Note one thing: If the Tenant presses the "pay now" button and checks the box authorizing the individual payment for those individual charges the Landlord is safe!

The problem is the ACH pull only.

+++++++++++++++

As a consumer: The consumer must notify their financial institution within 60 days of the sending of the first statement that includes the disputed transaction. The notification can be oral or written and must identify the consumer's name and account number and indicate why the consumer believes an error exists. The financial institution will then investigate. The process up to this point is defined in Federal Reserve Regulation E section 205.11 available at: http://ecfr.gpoaccess.gov/cgi/t/...

If the claim is that a transaction is unauthorized the consumer must make a written statement under penalty of perjury that the charge is unauthorized. This part is required by NACHA rules if the financial institution wants to recover the money (alternatively they could write it off and just give the money to the consumer to resolve the dispute).

As a RDFI (the financial institution that received the ACH being reversed):
There are two broad types of ACH returns that the RDFI might make:
A regular return is for reasons that the RDFI can determine itself (closed account, insufficient funds, wrong account number, stop payment), etc. These must be made within 2-3 days, but most are made within 24 hours.

A dispute return usually results from a customer inquiry (described above) but there are about 10 different return reason codes for very specific cases. This class of returns can be initiated up to 60 days after the initial transaction and follows a set of procedures set by NACHA.* For the simple case of a dispute over authorization of the transaction the RDFI submits a written statement under penalty of perjury to the ODFI (the originating institution) and the ODFI is then required to produce proof of authorization or reverse the transaction.

Further detail There are lots of arcane details about ACH returns in different very specialized cases. If you want relatively plain English explanations this blog has some good summaries: http://ach-consulting.com/

* Note that the ACH rules only allow returns for 60 days from the transaction while Reg E provides 60 days from the first statement showing the transaction. This creates a window of 1-30 days where the consumer can dispute a charge from their bank but the bank doesn't have any easy way to collect the money.

Originally posted by @Rick S. :

@Michael Herr I am checking with our bank just to confirm, however they are closed today for the holiday so I am hoping to here back tomorrow.  

 Checking with your bank is not good enough. They are not the rule maker. Read the rules : Federal Reserve Regulation E section 205.11. The Federal Reserve Bank is the clearing house for ALL banks. with ACH. They make the rules. You can easily get someones opinion, and it is only an opinion. 

Originally posted by @Jeff Gates :
Originally posted by @Rick S.:

@Michael Herr I am checking with our bank just to confirm, however they are closed today for the holiday so I am hoping to here back tomorrow.  

 Checking with your bank is not good enough. They are not the rule maker. Read the rules : Federal Reserve Regulation E section 205.11. The Federal Reserve Bank is the clearing house for ALL banks. with ACH. They make the rules. You can easily get someones opinion, and it is only an opinion. 

NACHA rules would apply for this type of ACH debit and based on my review NACHA rules don't require that a recurring payment authorization be a fixed amount.  You are referring to an R10 unauthorized return, however we aren't talking about debiting them randomly as we would obtain a recurring payment authorization from the tenant.  I understand the rules regarding an unauthorized transaction but this wouldn't be an unauthorized debit.  

Hi @Michael Herr ,

Personally if I was a tenant, I wouldn't sign up for it. Paying my rent automatically on the first... sure no problem. 

Allowing my landlord to choose when, for what and how much he wants to automatically pull money from my account? Not interested. Granted I am established enough now that I don't go below $50 in my account, but back when I was first starting out and renting I did. 

Scenario: You put in a pull for $35 for a sewer payment. It bounces because I had $20 in there. I had written a check at the grocery store for $11. That bounces now too. So I have 2 bank late fees, a bounced fee from the grocery store and you. If I had to make a choice I would have taken the late fee on the sewer bill and paid it on Friday.

Just my thoughts and good luck on whatever you decide.

Originally posted by @Mike Cumbie :

Hi @Michael Herr,

Personally if I was a tenant, I wouldn't sign up for it. Paying my rent automatically on the first... sure no problem. 

Allowing my landlord to choose when, for what and how much he wants to automatically pull money from my account? Not interested. Granted I am established enough now that I don't go below $50 in my account, but back when I was first starting out and renting I did. 

Scenario: You put in a pull for $35 for a sewer payment. It bounces because I had $20 in there. I had written a check at the grocery store for $11. That bounces now too. So I have 2 bank late fees, a bounced fee from the grocery store and you. If I had to make a choice I would have taken the late fee on the sewer bill and paid it on Friday.

Just my thoughts and good luck on whatever you decide.

I don't think the majority of tenants will sign up. I did have a tenant ask for this service for the quarterly sewer bill. 

If there was a relatively low max like $75/quarter, (enough to cover the sewer bill) then I'd personally sign up if I was a renter.

Originally posted by @Rick S. :
Originally posted by @Jeff Gates:
Originally posted by @Rick S.:

@Michael Herr I am checking with our bank just to confirm, however they are closed today for the holiday so I am hoping to here back tomorrow.  

 Checking with your bank is not good enough. They are not the rule maker. Read the rules : Federal Reserve Regulation E section 205.11. The Federal Reserve Bank is the clearing house for ALL banks. with ACH. They make the rules. You can easily get someones opinion, and it is only an opinion. 

NACHA rules would apply for this type of ACH debit and based on my review NACHA rules don't require that a recurring payment authorization be a fixed amount.  You are referring to an R10 unauthorized return, however we aren't talking about debiting them randomly as we would obtain a recurring payment authorization from the tenant.  I understand the rules regarding an unauthorized transaction but this wouldn't be an unauthorized debit.  

 When I decided to code this feature. I understood any "ACH pull" is subject to a 60 days window in which the tenant can refuse the payment and the payment will be refused by the bank. The Landlord can be surprised when a rent payment is refused latter and many days latter. This is the rule by the Federal Reserve Regulation E section 205.11. So I understood a "ACH pull" is very dangerous.  To mitigate this issue every ACH payment must be agreed by the tenant for each and every payment "instance" (not monthly withdrawals). When a tenant makes a rent payment, the tenant must check the checkbox that they agree with the payment amount and agree by the terms and conditions of each single payment " instance", then presses the "pay rent now" button.  All data of this approval is saved in the system to refute any dispute claim (including user ID , IP address, terms and conditions, agreed payment amount and date time stamp). In this case the Federal Reserve Regulation E section 205.11 does not apply since you have court supported proof to dispute any claim the tenant may make of unauthorized payment. Just because you don't understand it, does not make it safe. Remember this is only a issue with the "ACH pull". Not every type of ACH payment is a "ACH pull".

Originally posted by @Jeff Gates :
Originally posted by @Rick S.:
Originally posted by @Jeff Gates:
Originally posted by @Rick S.:

@Michael Herr I am checking with our bank just to confirm, however they are closed today for the holiday so I am hoping to here back tomorrow.  

 Checking with your bank is not good enough. They are not the rule maker. Read the rules : Federal Reserve Regulation E section 205.11. The Federal Reserve Bank is the clearing house for ALL banks. with ACH. They make the rules. You can easily get someones opinion, and it is only an opinion. 

NACHA rules would apply for this type of ACH debit and based on my review NACHA rules don't require that a recurring payment authorization be a fixed amount.  You are referring to an R10 unauthorized return, however we aren't talking about debiting them randomly as we would obtain a recurring payment authorization from the tenant.  I understand the rules regarding an unauthorized transaction but this wouldn't be an unauthorized debit.  

 When I decided to code this feature. I understood any "ACH pull" is subject to a 60 days window in which the tenant can refuse the payment and the payment will be refused by the bank. The Landlord can be surprised when a rent payment is refused latter and many days latter. This is the rule by the Federal Reserve Regulation E section 205.11. So I understood a "ACH pull" is very dangerous.  To mitigate this issue every ACH payment must be agreed by the tenant for each and every payment "instance" (not monthly withdrawals). When a tenant makes a rent payment, the tenant must check the checkbox that they agree with the payment amount and agree by the terms and conditions of each single payment " instance", then presses the "pay rent now" button.  All data of this approval is saved in the system to refute any dispute claim (including user ID , IP address, terms and conditions, agreed payment amount and date time stamp). In this case the Federal Reserve Regulation E section 205.11 does not apply since you have court supported proof to dispute any claim the tenant may make of unauthorized payment. Just because you don't understand it, does not make it safe. Remember this is only a issue with the "ACH pull". Not every type of ACH payment is a "ACH pull".

My understanding is that this is safer than accepting credit card(from a disputed charge standpoint). If getting one rejected is the only issue (which will be rare) I'm still all for it.

How do utility companies setup thier "ezpay" services? Or are they vulnerable to customers disputing within 60days?

Thank you for educating me of the risks.

@Jeff Gates Will you take a look at 205.10 regarding pre-authorized transfers?  That does state the consumer must be notified 10 days prior to the debit for changes in the amount and does mention a Range section.  Appreciate the feedback everyone.

@Michael Herr I heard back on this and will email you as it is possible according to our bank, however they have extra authorization and notification requirements for the variable amount.  We can discuss some options.

Thank you everyone for your feedback and just a note that this would be a pre-authorized recurring payment.  We wouldn't allow someone to just execute one-time debits against a tenant's account without their authorization as that would definitely lead to return issues as mentioned by Jeff and others.