The risk of fraudulent transactions involving the automated clearinghouse network is low, and the likelihood independent sales organizations will be liable for such transactions typically is lower, according to industry observers. Yet ACH-transaction risk for an ISO still exists if its agreement with an originating financial institution stipulates the ISO is liable for returned transactions, says Jan Estep, chief operating officer and president of NACHA, the Herndon, Va.-based electronic payments association that manages the U.S. ACH network. Originating depository financial institutions initiate transactions over the ACH network. "There may be agreements in place that call out how the responsibilities of the [originating depository financial institution] pass through the different parties" involved in the ACH transaction, Estep says, adding that any party involved, including ISOs, processors or merchant acquirers, may be held liable if the liability is specified in an agreement. Agreements from originating depository financial institutions are very explicit in their terms, says Ed Bachelder, a director with Boston-based Dove Consulting, a Division of Hitachi Consulting. ISOs are responsible for understanding their potential for liability in the flow of ACH transactions, says Estep. "All parties to the agreement with the [originating depository financial institution] need to be aware of their responsibilities," she says. "They need to read their agreements."