Section 127.10. Unauthorized payment.

  No seller in a telephone transaction may obtain or submit for payment any check, draft, or other negotiable instrument drawn on a consumer's account without that consumer's express, verifiable authorization. The following authorizations are considered verifiable:

(1)  An express written authorization. Express written authorization may include the consumer's signature on the check, draft, or negotiable instrument.

(2)  An express oral authorization if all of the following apply:

(a) The oral authorization is tape recorded and made available upon request to the consumer's bank.

(b) The oral authorization clearly authorizes payment for the goods and services offered to the consumer.

(c) The oral authorization clearly indicates that the consumer received information specifying all of the following:

1. The date and amount of the check, draft, or instrument.

2. The payor's name.

3. The number of payments, if more than one.

4. A telephone number for consumer inquiries that is answered during normal business hours.

5. The date of the consumer's oral authorization.

(3)  An authorization which the seller confirms in writing, provided that all of the following apply:

(a) The seller sends the written confirmation to the consumer before the seller submits the check, draft, or other negotiable instrument for payment.

(b) The written confirmation includes all of the following information:

1. The date and amount of the check, draft, or instrument.

2. The payor's name.

3. The number of payments, if more than one.

4. A telephone number for consumer inquiries that is answered during normal business hours.

5. The date of the consumer's authorization.

6. A procedure by which the consumer can obtain a refund from the seller if the written confirmation is inaccurate.

Cr. Register, July, 1999, No. 523 , eff. 8-1-99.