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Originator Watch List (OWL)

Frequently Asked Questions (FAQ)

1. Q. What is the Originator Watch List (OWL)?
   
   A. The OWL is a new risk management service that assists ODFIs in the evaluation of the risk profiles for ACH origination. The Originator Watch List (OWL) identifies Originators and Third-Party Senders that meet specified risk criteria. The OWL is a component of NACHA's strategic risk management framework for the ACH Network.
   
   
2. Q. Why is OWL being launched?
   
   A. The OWL is a proactive risk mitigation tool for ODFIs. With the OWL, NACHA risk investigations staff can leverage existing information regarding Originators or Third- Party Senders with track records and that may warrant review and provide that information to enhance ODFI underwriting and risk management.
   
   
3. Q. What criteria are employed in OWL?
   
   A. Originators and Third-Party Senders are measured against the following criteria:
   
   
   • Industry data, such as ACH Operator reports, indicating the volume of entries returned as unauthorized in a one month period equals or exceeds 500.
   • The Better Business Bureau rating for the company is listed as "Unsatisfactory" or is rated a "D" or an "F" or any variation of (e.g. "DD", "DDD", "FF", or "FFF").
   • 500 or more consumer complaints on public, consumer populated Web sites including http://www.ripoffreport.com, http://www.my3cents.com, http://www.consumeraffairs.com, and http://www.complaintsboard.com.
   • A judgment related to the entity's commercial payments practices within the last ten years.
   • The entity has entered into a consent decree or other agreement with regulatory or law enforcement authorities that points to problems with the entity's commercial payments practices within the last ten years.
   
   
   
4. Q. What determines if an Originator or Third-Party Sender is included in the OWL?
   
   A. NACHA's risk investigations staff maintain a record of Originators and Third-Party Senders meeting the above criteria. An entity meeting three or more criteria is included in the OWL. Staff will reevaluate entities monthly to determine if they should remain on the list. Staff will remove entities no longer meeting the criteria from the list. Interim changes also may be made, for example, if staff becomes aware of a judgment being entered relating to an entities payment practices or if an error is brought to the attention of NACHA staff. Members should periodically access the OWL to check for changes.
   
   
5. Q. How is an Originator or Third-Party Sender removed from the OWL?
   
   A. Staff will conduct a formal monthly review of the OWL and will remove Originators and Third-Party Senders that no longer meet three or more criteria.
   
   
6. Q. Is processing for or with an entity on the OWL prohibited?
   
   A. Listing of an entity on the OWL is informational only and does not in any way prohibit a listed entity from originating ACH transactions. However, ODFIs are encouraged to consider this information in their underwriting and risk management. The OWL is intended as a tool to supplement, not replace, other elements of ODFI risk assessments.
   
   
7. Q. When will the OWL be available?
   
   A. A pilot phase for NACHA Direct Members will launch December 19, 2007. Access to the OWL will be available via the homepages of the respective password protected Direct FI Member (http://dfi.nacha.org/) and Regional Payments Association (http://ae.nacha.org/) Web sites.
   
   NACHA anticipates making the OWL available to all ODFIs during phase two, expected to launch during second quarter 2008.
   
   
8. Q. Who can access the OWL?
   
   A. Direct FI Members are encouraged to begin using the OWL as a resource beginning December 19, 2007. Regional Payments Associations are invited to access the listing for information purposes only and are requested not to share the listing with their members during the first phase. The pilot phase provides an opportunity for Direct Members to communicate feedback to NACHA on the service.
   
   
9. Q. Who administers the OWL?
   
   A. NACHA's risk investigations staff administers the OWL.
   
   
10. Q. How is the OWL maintained?
    
    A. NACHA risk investigations staff conduct ongoing reviews of Originators and Third-Party Senders, with a formal review of the OWL monthly. The content is updated monthly based on the results of the application of the criteria.
    
    
11. Q. What are the user's obligations in using the OWL?
    
    A. User obligations are stated in the Terms of Use for the service posted at the OWL Web site. Among other things, Users are responsible for maintaining the privacy of their username and password and for notifying NACHA immediately should unauthorized access to the same occur. Users also may use the OWL information only for the purposes identified in the Terms of Use.