The TEL (Telephone-Initiated Entry) format is used for a single entry debit transaction, when an oral authorization is recorded for an ACH debit.
For more information regarding ACH, refer to About ACH Payments.
TEL entries are subject to the requirements of NACHA and the Electronic Fund Transfer Act.
TEL entries are used for a single ACH debit where an oral authorization has been received from the consumer using a telephone. A TEL entry should not be used where a standing authorization is in place, although the purchase may be transacted via the telephone. A TEL entry should only be used when the payment meets the following requirements:
There is an existing relationship between the merchant and the customer.
There is not an existing relationship between the merchant and the customer, but the customer initiated the telephone call.
A relationship is defined as either there being a written agreement in place or the customer has purchased goods or services from the merchant in the last two years.
The authorization does not have to be provided to the consumer in writing, however as the authorization is received orally, the merchant must tape record the authorization, or have, at an earlier date provided written notice that is followed up with an oral authorization. The following information must be included in the authorization:
The date on or after which the consumer's account will be debited;
The amount;
The customer's name;
A telephone number that is available to the customer and answered during normal business hours;
The date of the customer's oral authorization;
A statement by the merchant that the authorization obtained will be used to originate an ACH debit.
Merchants must implement risk management procedures relating to TEL entries:
Commercially reasonable procedures to verify the identity of the customer;
Commercially reasonable procedures to verify routing numbers are valid.
R07 is not an applicable return codes for a TEL transactions.
Information that appears on this page is taken from ACH Compliance Manual: How to Comply with ACH-Related Rules and Regulations, copyright 2003 by NACHA, Electronic Funds Transfer Act, Regulation E, Uniform Commercial Code, and Federal Reserve Regulation CC.