ACH Services Agreement
This ACH Services Agreement (the "Agreement") is between Patrick Payroll LLC, dba Whirks (“Whirks” or “Third-Party Sender”) and Employer (“Originator”). This Agreement governs the origination, processing, and transmission of Automated Clearing House (“ACH”) entries by Whirks on behalf of Employer through Whirks’ originating depository financial institution (“ODFI”).
1. Authorization to Transmit Entries
Employer (“Originator”) authorizes Patrick Payroll LLC, dba Whirks (“Third-Party Sender”) to create, process, and transmit Automated Clearing House (“ACH”) debit and credit entries on its behalf through Whirks’ originating depository financial institution (“ODFI”) in accordance with this Agreement, the NACHA Operating Rules and Guidelines (the “Rules”), and all applicable laws. Whirks, as a Third-Party Sender, shall ensure that all ACH entries are originated and transmitted in accordance with the NACHA Operating Rules and the agreement between Whirks and its ODFI. Whirks represents that it maintains a valid agreement with its ODFI to originate ACH entries on behalf of the Originator.
2. Compliance with Rules and Laws
Both Parties agree to comply with the NACHA Rules, as amended from time to time, and all applicable federal and state laws and regulations governing the origination and transmission of ACH entries, including but not limited to Regulation E, Regulation CC, the Uniform Commercial Code, and the Office of Foreign Assets Control (“OFAC”) requirements. Whirks, as a Third-Party Sender, shall conduct reasonable due diligence and ongoing monitoring of Employer’s compliance with the NACHA Rules and applicable laws, including but not limited to verifying the legitimacy of ACH entries and authorizations. Whirks shall implement risk management practices, including fraud monitoring and detection, to mitigate risks associated with Employer’s ACH entries, as required by the NACHA Rules.
3. Employer Warranties
Employer represents and warrants that:
a. Each ACH entry transmitted to Whirks has been properly authorized by the employee or third party whose account will be credited or debited.
b. Authorizations are obtained and retained in compliance with the NACHA Rules and will be provided to Whirks, the ODFI, or NACHA upon request. Employer warrants that all authorizations comply with the specific requirements of the NACHA Rules, including but not limited to the content, format, and retention of written or electronic authorizations for debit and credit entries.
c. The information provided for each entry is accurate, complete, and in the proper format.
d. No entry will be initiated that violates the laws of the United States, including OFAC restrictions.
e. Employer warrants that it will not submit entries that are fraudulent, unauthorized, or otherwise in violation of the NACHA Rules or applicable law, and will promptly notify Whirks of any suspected unauthorized or fraudulent activity.
f. If Employer uses prenotifications, it warrants that such prenotifications will be submitted in accordance with the NACHA Rules and that Employer will address any issues identified through prenotification responses before initiating live entries.
4. Indemnification
Employer agrees to indemnify and hold harmless Whirks, its ODFI, and their respective officers, directors, employees, and agents from any loss, liability, cost, or expense (including reasonable attorney’s fees) resulting from:
- Employer’s breach of the warranties set forth in this Agreement or the Rules;
- Employer’s failure to comply with the Rules or applicable law; or
- Unauthorized, fraudulent, or erroneous entries submitted by Employer.
Employer shall indemnify Whirks and its ODFI for any fines, penalties, or assessments imposed by NACHA, the ODFI, or any regulatory authority due to Employer’s failure to comply with the NACHA Rules or this Agreement. Employer acknowledges that Whirks, as a Third-Party Sender, may be held liable by its ODFI or NACHA for Employer’s actions and agrees to fully indemnify Whirks for any such liability.
5. Security Procedures
Employer agrees to implement and maintain commercially reasonable security procedures to protect the confidentiality and integrity of account numbers and other sensitive information, including encryption of data during transmission, restricted access, and secure storage, as required by the NACHA Security Rule. Whirks represents that it maintains a written information security program compliant with the NACHA Security Framework to protect Non-Public Personal Information (NPPI) and other sensitive data related to ACH entries. Both Parties shall protect Non-Public Personal Information (NPPI) in accordance with the NACHA Security Framework, Regulation E, and other applicable laws. Employer shall promptly notify Whirks of any data breach or unauthorized access to ACH-related data, and Whirks shall do the same in accordance with applicable law and the NACHA Rules. In accordance with NACHA Rules, large non-financial institution Originators, Third-Party Service Providers, and Third-Party Senders must protect deposit account information by rendering it unreadable when stored electronically.
6. Reversals, Returns, and Rejections
Employer acknowledges and agrees that:
- Reversals and corrections of ACH entries must comply with the Rules, including applicable time limits. Reversals must be initiated within five (5) banking days of the discovery of an erroneous entry or as otherwise required by the NACHA Rules.
- Employer is responsible for promptly funding its account to cover entries, returns, and adjustments. Employer shall maintain sufficient funds in its account to cover all entries, returns, adjustments, and fees, and shall immediately fund any deficiencies upon Whirks’ request.
- Whirks and its ODFI may reject or return any entry that does not comply with the Rules or this Agreement.
7. Audit and Cooperation
Employer agrees to cooperate with any audit, investigation, or inquiry conducted by Whirks, its ODFI, NACHA, or applicable regulators, including providing requested records of authorizations or related documentation. Whirks, as a Third-Party Sender, shall conduct periodic audits of Employer’s ACH activities to ensure compliance with the NACHA Rules and may request additional documentation or information as needed. Audits may include, but are not limited to, reviews of authorization records, compliance with NACHA Rules, and risk management practices.
8. Suspension or Termination
Whirks may immediately suspend or terminate ACH services if Employer violates this Agreement, the Rules, or applicable law, or if Whirks reasonably determines that continued processing of Employer’s entries may create risk or liability. Whirks may suspend or terminate ACH services if Employer’s return rates exceed thresholds established by the NACHA Rules (e.g., unauthorized return rate exceeding 0.5%) or if Whirks determines that Employer’s activities pose unacceptable risk. Whirks shall notify Employer promptly of any suspension or termination, except where such notification is prohibited by law or the NACHA Rules.
9. Record Retention
Employer shall maintain records of all authorizations, entries, and related documentation for at least two (2) years from the termination or revocation of the authorization, or such longer period as required under the Rules. Employer shall retain records of authorizations for at least two (2) years following the revocation or termination of the authorization, and other ACH-related records for the period required by the NACHA Rules or applicable law. Whirks shall retain records of ACH entries and related documentation as required by the NACHA Rules and its agreement with the ODFI.
10. Third-Party Sender Registration
Whirks represents that it is registered with NACHA as a Third-Party Sender and will provide NACHA with required information about Employer, as mandated by the NACHA Rules.
11. Exposure Limits
Whirks may establish exposure limits for Employer’s ACH activity, as required by the NACHA Rules, and Employer agrees to comply with such limits.
12. ACH Origination Fees and Costs
Employer shall be responsible for all fees, costs, and charges associated with ACH entries, including but not limited to ODFI fees, return fees, and NACHA penalties.
13. Fraud Monitoring and Reporting
Employer shall promptly report to Whirks any suspicious, fraudulent, or unauthorized ACH activity and cooperate fully in any investigation. In anticipation of upcoming NACHA Rules effective in 2026, both Parties agree to implement commercially reasonable fraud detection practices, including monitoring forward and return volumes for ACH entries.
14. Consumer Notification Requirements
Employer shall provide all required consumer notifications for ACH entries, including but not limited to advance notice of recurring debits, in accordance with the NACHA Rules.
This Agreement constitutes the entire understanding between the Parties and may be amended only in writing signed by both Parties. This Agreement is governed by the laws of Tennessee, without regard to conflict of laws principles.
15. Prohibited Transactions
Employer shall not use or attempt to use Whirks’ services (i) to engage in any illegal purpose or activity or to violate any Applicable Law, (ii) to breach any contract or agreement by which you are bound, or (iii) to engage in any activity or business that would result in you being or becoming a money service business as defined in the Bank Secrecy Act and its implementing regulations.
The following merchants are also excluded from originating transactions with Whirks:
- Any merchant about whom Whirks has knowledge that the business functions performed by the merchant are deemed illegal by, or are in direct conflict with U.S. federal, state, or local laws.
- Any merchant about whom Whirks has knowledge that the merchant has not obtained the licensing or registration required by jurisdiction(s) in which it operates
- Any merchant selling products that infringes on the intellectual property rights of others, including counterfeit goods or any product or service that infringes on the copyright, trademark, or trade secrets of any third party
- Any merchant location outside the United States, Puerto Rico, Virgin Islands, American Samoa, or Guam
- Any product, service, or activity that may be the type that presents a deceptive, unfair, predatory, or reputational risk
- Charities without evidence of 501(c)(3) or equivalent status; or foreign owned charities
- Crowdfunding
- Escort Services, Illegal Adult or Pornographic Content
- High-Interest Rate non-bank consumer lending including, but not limited to, Payday Lending, Car Title Loans and Loan Modifications.
- Marijuana Dispensaries and related products or services
- Money Service Businesses
- Multi-Level Marketing
- Nested Third Party Payment Processors
- Penny Auctions
- Virtual Asset Service Providers
- ATM Owners/service providers
- Credit Repair, Debt Collection, Elimination or Reduction Services
- Cyberlockers
- Digital Wallet or Prepaid Card Companies Discount Buying Membership
- Discount Buying Membership
- Distressed Property Sales and Marketing
- E-cigarettes
- Entities with International Payment Needs
- Internet State Lottery or Sweepstakes
- Legal Gambling, including Sports Forecasting & Odds Making
- Licensed Debt Repayment
- Negative option subscription enrollment
- Nutraceuticals
- Online Pharmaceutical Sales
- Purchase of remediation software supported by call center
- Student Loan Counseling/Servicing (For Profit)
- Travel Agencies and/or Timeshares
- Warranty Companies
