A merchant issues a paper gift certificate that entitles the bearer to a specified dollar amount that can be applied towards a future meal. iii. Transfers to the account-holding institution (by ATM, for example) must show the institution as the recipient, unless other information on the statement (such as, loan payment from checking) clearly indicates that the payment was to the account-holding institution. Displaying title 12, up to date as of 6/29/2023. Whether the check number of the transaction in question is notably out-of-sequence; iv. Signs of equal prominence at the top of each side of the display clearly differentiate between gift cards and the other types of prepaid cards that are available for sale. 1. A financial institution that has fully complied with the error resolution requirements has no further responsibilities under this section should the consumer later reassert the same error, except in the case of an error asserted by the consumer following receipt of information provided under paragraph (a)(1)(vii) of this section. (1) A financial institution need not furnish periodic statements required by 205.9(b) if the institution makes available to the consumer. Electronic fund transfer service provider not holding consumer's account. Section 5(4) is preempted to the extent that it relates to the section of state law governing consumer liability for unauthorized use of an access device. 3. 2. Preauthorized transfers exempt under this paragraph (c)(7) remain subject to 205.10(e) regarding compulsory use and sections 915 and 916 of the act regarding civil and criminal liability. (d) Business day means any day on which the offices of the consumer's financial institution are open to the public for carrying on substantially all business functions. The term affiliated group of merchants means two or more affiliated merchants or other persons that are related by common ownership or common corporate control (see, e.g., 12 CFR 227.3(b) and 12 CFR 223.2) and that share the same name, mark, or logo. Examples of covered transfers. Untimely notice of error. b. Electronic disclosures must be in a retainable form. disclosure requirements of Regulation E. 5. The term does not include an electronic fund transfer initiated: (1) By a person who was furnished the access device to the consumer's account by the consumer, unless the consumer has notified the financial institution that transfers by that person are no longer authorized; (2) With fraudulent intent by the consumer or any person acting in concert with the consumer; or. For example, the term includes franchisees that are subject to a common set of corporate policies or practices under the terms of their franchise licenses. Sales promotions operated or administered by a merchant or product manufacturer that provide coupons or discounts redeemable for or towards goods or services or other monetary value. The number or code need not exceed four digits or letters to comply with the requirements of this paragraph (a)(4). You may use your [card][code] to: (i) Withdraw cash from your [checking] [or] [savings] account. There are three possible tiers of consumer liability for unauthorized EFTs depending on the situation. A financial institution shall mail or deliver a written notice to the consumer, at least 21 days before the effective date, of any change in a term or condition required to be disclosed under 205.7(b) if the change would result in: (ii) Increased liability for the consumer; (iii) Fewer types of available electronic fund transfers; or. For example, if a consumer has a negative balance of $30, of which $10 is attributable to a one-time debit card transaction, an institution complies with the fee prohibition if it does not assess a sustained overdraft fee while that negative balance remains outstanding. When a consumer requests copies of documents, the financial institution must provide the copies in an understandable form. In addition to any disclosures required under 205.20(d)(2), any applicable disclosures under 205.20(e)(3) and (f)(2) of this section must also be provided on the certificate or card. If the amount of the fee may vary due to the amount of the transaction or due to other factors, the posted notice may explain how the fee will be determined, but the notice provided to the consumer must state the dollar amount of the fee if the amount can be calculated at the time the notice is provided or mailed to the consumer. 1. The institution may give the notice of correction and the explanation separately or in a combined form. The institution's report of the results of its investigation shall include a written explanation of the institution's findings and shall note the consumer's right to request the documents that the institution relied on in making its determination. Error asserted after account closed. See comment 20(a)(7)1. Exclusion explained. A security code need not originate with the account-holding institution. (ii) Are not required to be provided on or after January 31, 2013, with respect to messages during customer service calls and Web sites. Identifying the deposit is sufficient; however, simply providing the current account balance is not. The institution may not wait for the payee-originator to terminate the automatic debits. A card, code, or other device, including a general-purpose reloadable card, is marketed or labeled as a gift card or gift certificate even if it is only occasionally marketed as a gift card or gift certificate. Paragraph 20(c)(3)Disclosure Prior to Purchase. The institution may not assess an overdraft fee for the debit card transaction. Periodic statements may be sent on a cycle that is shorter than monthly. Preauthorized transfers. (1) Timing; contents. 1. 5. The requirement to obtain a consumer's authorization to collect a fee via EFT for the return of an EFT or check unpaid applies only to the person that intends to initiate an EFT to collect the returned item fee from the consumer's account. (iii) Indicates why the consumer believes an error exists and includes to the extent possible the type, date, and amount of the error, except for requests described in paragraph (a)(1)(vii) of this section. Except as provided in paragraph (b) of this section, a financial institution may issue an access device to a consumer only: (1) In response to an oral or written request for the device; or. 10. 2. Representing or suggesting that a certificate or card can be given to another person, for example, as a token of appreciation or a stocking stuffer, or displaying a congratulatory message on the card, certificate or accompanying material; C. Incorporating gift-giving or celebratory imagery or motifs, such as a bow, ribbon, wrapped present, candle, or congratulatory message, on a card, certificate, accompanying documentation, or promotional material; A. A financial institution need not retain records that it has given disclosures and documentation to each consumer; it need only retain evidence demonstrating that its procedures reasonably ensure the consumers' receipt of required disclosures and documentation. For purposes of this section, a consumer is deemed to request an access device when the consumer applies for government benefits that the agency disburses or will disburse by means of an electronic fund transfer. iv. All transfers occur at terminals located within 50 miles of the financial institutions's main office. (3) Crediting. 1. (1) General. The person also must either provide the consumer with a copy of the posted notice (or a substantially similar notice) at the time of the transaction, or mail the copy (or a substantially similar notice) to the consumer's address as soon as reasonably practicable after the person initiates the electronic fund transfer to collect the fee. For example, U.S. For a consumer who does not opt into the institution's overdraft service for ATM and one-time debit card transactions, an institution may also comply with the fee prohibition in 205.17(b)(1) by not assessing daily or sustained overdraft, negative balance, or similar fees or charges unless a consumer's negative balance is attributable solely to check, ACH or other types of transactions not subject to the fee prohibition while that negative balance remains outstanding. An institution may, but is not required to, list additional alternatives for the payment of overdrafts. The retailer does not affirmatively indicate or represent that gift cards are available, such as by displaying any signage or other indicia at the checkout lane suggesting the general availability of gift cards. The retailer does not use any more conspicuous signage suggesting the general availability of gift cards, such as a large sign stating Gift Cards at the top of the display or located near the display. The requirement that funds underlying a certificate or card must not expire for at least five years from the date of issuance or date of last load ceases to apply once the certificate or card has been fully redeemed, even if the underlying funds are not used to contemporaneously purchase a specific good or service. The use of appropriate clauses in making disclosures will protect a financial institution from liability under sections 915 and 916 of the act provided the clauses accurately reflect the institution's EFT services. The following examples illustrate this rule. Consistent with 205.5(a), a financial institution may issue an access device only in response to an oral or written request for the device, or as a renewal or substitute for an accepted access device. 205.17 Requirements for overdraft services. For purposes of 205.3(b)(2) and (b)(3), 205.10(b), (d), and (e), 205.13, and 205.20, this part applies to any person. A financial institution may require appropriate documentation from the person representing the consumer to establish that the person is acting on the consumer's behalf. SAVE THE RECEIPTS YOU ARE GIVEN WHEN YOU USE YOUR [NAME OF CARD] CARD, AND CHECK THEM AGAINST THE ACCOUNT STATEMENT YOU RECEIVE FROM YOUR BANK OR OTHER FINANCIAL INSTITUTION. Gift cards are segregated from excluded cards, with gift cards on one side of the display and excluded cards on a different side of a display. These provisions do not limit the institution's ability to debit the consumer's account for the amount overdrawn if the institution is permitted to do so under applicable law. If, at settlement, the consumer has insufficient funds in the account (for example, due to intervening transactions that post to the consumer's account), the institution is not permitted to assess an overdraft fee or charge for paying that transaction. If the financial institution is unable to complete its investigation within 10 business days, the institution may take up to 45 days from receipt of a notice of error to investigate and determine whether an error occurred, provided the institution does the following: (i) Provisionally credits the consumer's account in the amount of the alleged error (including interest where applicable) within 10 business days of receiving the error notice. A financial institution that provides information under paragraph (b) of this section, shall comply with the following: (1) Initial disclosures. The notice must be placed on a conspicuous location of the coupon book that a consumer can retainfor example, on the first page, or inside the front cover. For example, a person may issue or sell a supplemental gift card that is smaller than a standard size and that does not bear the applicable disclosures if it is accompanied by a fully compliant certificate or card. The service provider shall notify the account-holding institution of the period during which the account-holding institution must honor debits to the account in accordance with 205.11(d)(2)(ii). To verify the consumer's identity, a financial institution may use any reasonable means, such as a photograph, fingerprint, personal visit, signature comparison, or personal information about the consumer. On or after October 1, 2022, creditors will be required to comply with these revised change-in-terms notice requirements. (2) The history of account transactions provided under paragraphs (b)(1)(ii) and (iii) of this section must include the information set forth in 205.9(b). Similarly, this rule does not mention any notice requirements associated with changes that would reduce . The disclosures required by this paragraph must be provided before a certificate or card is purchased regardless of whether the certificate or card is purchased in person, online, by telephone, or by other means. 5. A financial institution shall mail or deliver a written notice to the consumer, at least 21 days before the effective date, of any change in a term or condition required to be disclosed under 1005.7 (b) of this part if the change would result in: ( i) Increased fees for the consumer; ( ii) Increased liability for the consumer; (v) Transfers resulting from debit card transactions, whether or not initiated through an electronic terminal. (4) Loyalty, award, or promotional gift card means a card, code, or other device that: (i) Is issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in connection with a loyalty, award, or promotional program; (ii) Is redeemable upon presentation at one or more merchants for goods or services, or usable at automated teller machines; and. Microsoft Edge, Google Chrome, Mozilla Firefox, or Safari. Third party providing notice. Transfers to an account of the consumer held at another institution. If the transaction debits a checking account only (with no credit extended), the provisions of Regulation E apply. 1. Reference to toll-free telephone number and Web site. (iii) Error resolution. The financial institution must honor an oral stop-payment order made at least three business days before a scheduled debit. 205.18(c)(1). An on-line merchant electronically provides a bar code, card or certificate number, or certificate or coupon to a consumer that the consumer may print on a home printer and later redeem towards the purchase of goods or services. [If your payment is returned unpaid, you authorize [us/ name of person collecting the fee electronically] to make a one-time electronic fund transfer from your account to collect a fee. (iii) Delayed compliance date for fee disclosure. 1. Mortgages with graduated payments in which a pledged savings account is automatically debited during an initial period to supplement the monthly payments made by the borrower. Expiration of temporary exemption. Before a gift certificate, store gift card, or general-use prepaid card is purchased, a person that issues or sells such certificate or card must disclose to the consumer the information required by paragraphs (d)(2), (e)(3), and (f)(1) of this section. If you need more information about our error resolution procedures, call us at [telephone number][the telephone number shown above]. Post in a prominent and conspicuous location on or at the automated teller machine a notice that: (i) A fee will be imposed for providing electronic fund transfer services or for a balance inquiry; or, (ii) A fee may be imposed for providing electronic fund transfer services or for a balance inquiry, but the notice in this paragraph (c)(1)(ii) may be substituted for the notice in paragraph (c)(1)(i) only if there are circumstances under which a fee will not be imposed for such services; and. (4) Investigation. A. The agency shall modify the disclosures under 205.7(b) by disclosing: (i) Account balance. 1693 et seq. The date the consumer initiates the transfer. Similarly, 205.20 applies to a device with a chip or other embedded mechanism that links the device to stored funds, such as a mobile phone or sticker containing a contactless chip that enables the consumer to access the stored funds. For purposes of 205.20(g)(2), the period of eligibility is the time period during which a consumer must engage in a certain action or actions to meet the terms of eligibility for a loyalty, award, or promotional program and obtain the card, code, or other device. A consumer purchases a $25 gift card that the holder of the gift card can use to make purchases at a merchant, or, alternatively, can apply towards the cost of admission to the merchant's affiliated amusement park. Institutions that choose to investigate notices of error provided up to 120 days from the date a transaction has posted to a consumer's account may still disclose the error resolution time period required by the regulation (as set forth in the Model Form in Appendix A7). The institution need not refund fees that would have been imposed whether or not the error occurred. When an access device is involved in the unauthorized transfer, the consumer may be liable for other amounts set forth in paragraphs (b)(1) or (b)(2) of this section, as applicable. Clear and conspicuous standard. switch to eCFR drafting site. An account-holding institution must disclose any fees it imposes on the consumer for EFTs, including fees for ATM transactions in an interchange or shared ATM system. The authorization requirement does not apply to any fees assessed by the consumer's account-holding financial institution when it returns the unpaid underlying EFT or check or pays the amount of an overdraft. The address and telephone number provided on an error resolution notice under 205.8(b) given on or with the statement satisfies this requirement. (i) The consumer's account balance, through a readily available telephone line; (ii) An electronic history of the consumer's account transactions, such as through an Internet Web site, that covers at least 60 days preceding the date the consumer electronically accesses the account; and. Examples of loyalty, award, or promotional programs. In addition to following the procedures specified in paragraph (c) of this section, the financial institution shall follow the procedures set forth in this paragraph (d) if it determines that no error occurred or that an error occurred in a manner or amount different from that described by the consumer: (1) Written explanation. (g) Electronic fund transfer is defined in 205.3. ). (4) Identification. A single telephone number, preceded by the direct inquiries to language, will satisfy the requirements of 205.9(b)(5) and (6). For example, an issuer may have a merchant install in-store signage with the disclosures required by 205.20(h)(2) on the issuer's behalf. A financial institution may include promotional material on receipts if the required information is set forth clearly (for example, by separating it from the promotional material). 2. The catchlines are not part of the clauses and need not be used. 1. A preauthorized electronic fund transfer under Regulation E is one authorized by the consumer in advance of a transfer that will take place on a recurring basis, at substantially regular intervals, and will require no further action by the consumer to initiate the transfer. Regulation E protects consumers when they use electronic fund and remittance transfers. Assuming that Saturday is a business day and Sunday is not, the two-business-day period begins on Saturday and expires at 11:59 p.m. on Monday, not at the end of the financial institution's business day on Monday. While a financial institution may request a written, signed statement from the consumer relating to a notice of error, it may not delay initiating or completing an investigation pending receipt of the statement. Certain general-purpose reloadable cards that are typically marketed as an account substitute initially may be sold or issued in the form of a temporary non-reloadable card. In other cases, a card, code, or other device may entitle the consumer to a certain percentage off the purchase of a good or service, such as 20% off of any purchase in a store. For example, a Regulation E statement must be provided quarterly for an account that also receives payroll deposits electronically, or for any month in which an account is also accessed by a withdrawal at an ATM. To the extent permitted, oral disclosures meet the standard when they are given at a volume and speed sufficient for a consumer to hear and comprehend them. 2. E, 61 FR 19669, May 2, 1996, as amended at 63 FR 52118, Sept. 29, 1998; 66 FR 13412, Mar. If you would like to comment on the current content, please use the 'Content Feedback' button below for instructions on contacting the issuing agency. 3. California Rules of Court: Title Two Rules Application to employers and service providers. Same facts as in i., except that the retailer sells a variety of prepaid card products, including store gift cards and general-purpose reloadable cards, arranged side-by-side in the same checkout lane. (d) Notice of transfers varying in amount . View the most recent official publication: These links go to the official, published CFR, which is updated annually. 1, 2010; 75 FR 50688, Aug. 17, 2010; 75 FR 66649, Oct. 29, 2010]. In this situation, if the card is stolen and used, the liability limits and the error resolution provisions of Regulation E apply. Non-physical certificates and cards. Section 205.11Procedures for Resolving Errors. An institution may provide disclosures covering all EFT services that it offers, even if some consumers have not arranged to use all services. (a) Initial and annual error resolution notice ( 205.7(b)(10) and 205.8(b)). (a) Definition. With the exception of transfers covered by 205.14, a financial institution's review of its own records regarding an alleged error satisfies the requirements of this section if: (i) The alleged error concerns a transfer to or from a third party; and. Written authorization for preauthorized transfers. For example, the institution could require the consumer, at account opening, to sign a signature line or check a box on a form (consistent with comment 17(b)6) indicating whether or not the consumer affirmatively consents at account opening. after 12 mos.. 3. A consumer authorizes a one-time electronic fund transfer (in providing a check to a merchant or other payee for the MICR encoding, that is, the routing number of the financial institution, the consumer's account number and the serial number) when the consumer receives notice and goes forward with the underlying transaction. In addition, if a consumer attempts to engage in a transaction with a gift certificate, store gift card, or general-use prepaid card, but the transaction cannot be completed due to technical or other reasons, such attempt does not constitute activity. 1. Receipts at electronic terminals; periodic statements. If the consumer notifies the institution within 60 days of the transmittal of the periodic statement that shows the unauthorized transfer, the consumer has no liability. If the financial institution determines an error occurred, within either the 10-day or 45-day period, it must correct the error (subject to the liability provisions of 205.6 (a) and (b)) including, where applicable, the crediting of interest and the refunding of any fees imposed by the institution. and have been assigned OMB No . For purposes of this part, the following definitions apply: (1) Access device means a card, code, or other means of access to a consumer's account, or any combination thereof, that may be used by the consumer to initiate electronic fund transfers. Name of owner or operator of terminal. The Board accounts for the paperwork burden associated with the CFPB's Regulation E . A single entry may be used to identify both the terminal location and the name of the third party to or from whom funds are transferred. The financial institution must still comply with the applicable periodic statement requirements for any other EFTs to or from the account. (1) General rule. [Reg. guide. 5. 3. iv. Disclosures made under this section must be clear and conspicuous. However, the posting of a company policy that funds may be disbursed by prepaid card (such as a sign posted at a cash register or customer service center stating that store credit will be issued by prepaid card) does not constitute the marketing of a card, code, or other device to the general public. (2) Conditioning payment of other overdrafts on consumer's affirmative consent. ii. Application of liability provisions. 2. Section 205.17Requirements for Overdraft Services. If the consumer's delay in notifying the financial institution was due to extenuating circumstances, the institution shall extend the times specified above to a reasonable period. Accumulation of fees.