305-800-1000 - this number of ACH trying to minimize irregularities of payday lenders?

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• Originator:
  A corporation, an individual or an entity that is responsible for initiating entries into the ach network is referred to as an originator.
• ODFI (Originating Depository Financial Institution):
  ODFI is a financial institution that is responsible for originating ach entries. The ODFI functions in accordance with the NACHA operating guidelines.
• Receiver:
  A corporation or an individual who authorizes an Originator to initiate a debit or a credit entry to a transaction account.
• RDFI (Receiving Depository Financial Institution):
  It may be referred to any financial institution that has agreed to follow NACHA Operating Rules and Guidelines and has qualified to receive ach entries.

1. The Originator gets an authorization from the Receiver.
2. Once the authorization is received, the Originator forwards the transaction to ODFI.
3. The ODFI is responsible for sorting as well as transmitting the file to the ach operator.
4. The ACH operator in turn distributes the ach file to the RDFI.
5. The RDFI prepares a report after making the funds available to the Receiver.

The Federal Reserve has centralized application software that is used for ach transactions. The software is known as FedACH. Ach process is widely used by the Federal government as well as the commercial sectors.

Importance of ACH Transactions:
Some of the areas where the ACH transactions are used include the following:

• E-commerce payments
• E-checks
• Business to business payments
• Federal, State and local tax payments
• Direct deposit of payroll, tax refunds, Social Security as well as other benefits offered by the Government.
• Loans, Utility bills, insurance premiums, mortgage bills
This system has been widely used by the lenders throughout US. It has been observed that due to the ACH transaction, the illegal activities of many payday loan companies could be stopped. This may be attributed to the fact that an authorization from the Receiver is required to debit money into an account. Similarly, an authorization is also required to credit money into an account. This has stopped several payday loan companies from carrying out fraudulent transactions.