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Wet Signature Not Required – Say What?!

Amy Donaghue

By: Danielle James, AAP, NCP, Director, Payments Education

Are the days of utilizing pen and paper and physically signing your signature to return an unauthorized ACH debit entry a thing of the past? While anecdotal evidence suggests that most Written Statement of Unauthorized Debit (WSUD) forms are still being obtained via paper using a wet signature, the ACH Rules are being adjusted to make it clear this isn’t always necessary.

Looking back on my days of working in a financial institution, I remember it was extremely important to obtain a consumer’s wet signature prior to returning an ACH debit as unauthorized. Also, during my time as an EPCOR auditor, I recall a financial institution verifying their account holder via an oral code/word and using that as the wet signature prior to returning an ACH debit as unauthorized. At the time, this puzzled me as an auditor because that was the first time I had come across an oral code/word used as a signature on a WSUD form.

I’ve always heard the saying “time changes things,” which is true in nearly everything, including the ACH Rules. Today, the ACH Rules allow electronic records and electronic signatures, which has resulted in confusion about the electronic or oral acceptance of WSUDs.

Effective September 17, 2021, the ACH Rules will clarify and explicitly address electronic or oral methods when obtaining a WSUD. The Written Statement of Unauthorized Debit via electronic or oral methods rule will reduce an administrative burden on RDFIs and their account holders.

This new rule change, as well as other new rules being classified by the industry as “Meaningful Modernization”, will be covered during Payment Systems Update. Season 3 of Payment Systems Update kicks off TODAY and airs through June 25th If you haven’t yet registered for this event, subscribe today! Your registration includes access to the recordings for ALL three seasons so you can catch up on ALL the NEED-TO-KNOW payments information you’ve missed. We hope to see you at the series finale!