Special Alert: District Court Confirms Telephonic Consent to Preauthorized ACH Debits Complies with ESIGN and EFTA
On February 17, a U.S. District Court in Nashville, TN found that a creditor complied with both the Electronic Signatures in Global and National Commerce Act[1] (“ESIGN”) and the Electronic Fund Transfer Act[2] and its implementing regulation, Regulation E[3] (collectively “EFTA”) when it obtained a consumer’s “written” authorization over the telephone to enroll in recurring ACH payments and mailed a paper copy of the authorization to the consumer two days later.[4] This case (“Blatt”) is significant because it clarifies and confirms much of the existing understanding of the interaction between ESIGN and the Uniform Electronic Transactions Act, and provides precedent for advancing the validity of widespread industry practices in other courts.
[1] 15 U.S.C. § 7001, et seq.
[2] 15 U.S.C. § 1693, et seq.
[3] 12 C.F.R. §1005.1, et seq.
[4] Blatt v. Capital One Auto Finance, [Memorandum and Order] No. 2:15-cv-00015, 2017 WL 660677 (M.D.Tenn. Feb. 17, 2017).