Sample Pre-Authorized Debit Agreement

  • Aprile 12, 2021

The client undertakes to waive all pre-registration requirements under Payments Canada`s rules regarding bank account debits under this agreement, including, but not limited to pre-reporting of the amount or payment dates of all debits taken from the bank account. In addition, if this agreement is entered into electronically, the customer agrees to reduce the time within which the customer must obtain confirmation of this agreement before the expiry date of the first ADP. Keep a copy of the agreement or confirm your reference. In order to offer its customers pre-authorized debits, an organization must enter into a contract (generally referred to as an H1 payment letter in good standing) with your financial institution. In this agreement, your financial institution agrees to be able to issue PADs on behalf of the accountant and you agree to abide by the rules applicable to ADP. There are imperative elements that must be included in this letter of commitment. Detailed information can be found in Rule H1. If the existing agreements do not contain a transfer clause, the new owner must provide in writing all details of the transfer (including the name and contact information of the new owner) at least 10 days before the accounts are withdrawn. The new beneficiary can also enter into a new agreement with any debiteur. Here are three ways to verify your client`s identity if you accept electronic ADP agreements. We start with the most important part: if you want to accept your customers` pre-authorized withdrawals, you must obtain and document a legal authorization.

For variable fixed-interval ADP amounts (p.B months), the customer must be notified at least 10 days before each payment, unless both parties have agreed to shorten or waive this “pre-registration period” in the payer`s PAD agreement. The waiver must be prominently presented in a paper agreement (z.B in bold, highlighted or underlined) or explicitly communicated in the case of an electronic agreement. Organizations must also have an agreement, a payer`s PAD agreement, with their customers.