Topic: Automated Teller Machines (ATMs)
-
The Official Interpretations for Regulation E note that an unauthorized electronic fund transfer (EFT) includes a transfer made by a consumer at an ATM who was “induced by force to initiate the transfer.” Does similar logic apply when other types of electronic payments are initiated by threat or force? For example, would a customer held at gunpoint and forced to make an EFT using a mobile payment app (such as Venmo) be considered unauthorized?
—
by
In our view, an electronic payment initiated by a consumer through a third-party mobile app like Venmo under threat or force technically would not be considered an “unauthorized transaction.” However, while a consumer may not be eligible for a legally mandated reimbursement for such a transaction, your bank could voluntarily reimburse the customer based on…
-
On our website we list the different types of accounts our bank offers. Can we put hyperlinks leading to the account disclosures on a different page, or do the disclosures need to be on the same page? We do not display any rates, but we do have disclosures related to mobile banking (carrier fees may apply) and foreign ATMs (fees may be charged by non-bank owned ATMs).
—
by
Yes, we believe it would be acceptable for a webpage describing different account types to include a link to a separate page that provides disclosures regarding mobile banking and ATM fees. We are not aware of any specific requirements for disclosing that a carrier may impose messaging or data rates, although we do view this…
-
Our bank is located on the border of Missouri. Will it change our Community Reinvestment Act (CRA) assessment area if we put a non-deposit taking ATM in that state? We would not open any branches in that state.
—
by
No, we do not believe that installing non-deposit taking ATMs in another state would alter your bank’s required CRA assessment areas. Your CRA assessment areas must include your bank’s main office, its branches, and its deposit-taking ATMs (as well as the surrounding geographies in which your bank has originated or purchased a substantial portion of…
-
Can we charge off an overdrawn account immediately if we suspect fraud? A new customer opened an account by depositing a $400 check. The check was drawn on a closed account, so we returned the check. However, he had already withdrawn the full amount of the check from an ATM, causing his account to be overdrawn by $400, plus a small overdraft fee. Typically, we wait 60 days to charge off an overdrawn account, but we suspect that the customer was engaging in deposit fraud. Can we charge off his account right away?
—
by
Yes, we believe that you may charge off the account right away. The Joint Agency Guidance on Overdraft Protection Programs states that “overdraft balances should generally be charged off when considered uncollectible, but no later than 60 days from the date first overdrawn.” In other words, the longest you can wait to charge off an…
-
We have a Visa Business Cardholder who has reported several unauthorized transactions. Does the Visa Zero Liability Rule apply to ATM transactions or other purchases that did not go through the Visa network, such as Pulse, Mac/Star? Can we deny reimbursement for such unauthorized transactions? We believe that our disclosure permits us to deny such reimbursement claims.
—
by
No, according to Visa’s website, Visa’s Zero Liability does not apply to ATM transactions, or PIN transactions not processed by Visa, or certain commercial card transactions. In addition, because this is a business customer, Regulation E’s unauthorized transaction requirements do not apply. However, before denying reimbursement for the unauthorized transactions, we do recommend reviewing your…
-
We are switching to a new core processor, which will result in several changes to our debit card program. The daily ATM withdrawal limit will be raised, and the current limits for PIN- and signature-based point of sale transactions will be combined, without lowering the current limits. Do we have to provide advance notice for these changes? If not, do we have to provide any kind of notice?
—
by
No, we do not believe that these changes would require a change in terms notice. Regulation E requires change in terms notices when a change would result in “stricter limitations on the frequency or dollar amounts of transfers.” The changes you described would either increase or maintain your bank’s current limitations on the dollar amounts…
-
Now that the nonbank ATM registration requirements have been repealed, should we change our BSA risk or monitoring procedures for customers that own nonbank ATMs?
—
by
No, we do not recommend changing your current BSA and monitoring practices for customers that own nonbank ATMs. These customers are no longer required to file statements of ownership with the Illinois Department of Financial Regulation (IDFPR), but this should not affect your bank’s risk assessment of these customers. If your bank has determined that…
-
Is there any requirement that we must provide a receipt to customers for deposits — whether made in-person, through the night drop, or through the mail? I am not aware of any federal requirement. Is there a state law that addresses this subject?
—
by
No, we are not aware of an Illinois law that requires financial institutions to issue receipts for deposits. However, Regulation E does require financial institutions to make receipts available for certain electronic deposits. If a consumer initiates a deposit of over $15 by an electronic fund transfer initiated at an electronic terminal, Regulation E would…
-
One of our customers has a freestanding ATM that recently was converted to be a payout device connected to a gaming machine. He is registered with the Illinois Gaming Board. Does he also need to keep the ATM registered with the state? What kind of due diligence is required?
—
by
Yes, if the ATM terminal continues to dispense cash from customers’ bank accounts, your customer should maintain its registration as a nonbank ATM with the Illinois Department of Financial and Professional Regulation. Because your customer now is operating a video gaming terminal, we do recommend some heightened monitoring due to the many requirements in the…
-
If we discover that one of our ATMs has a skimming device, what is our potential liability? Would we have some sort of mass liability outside of fraudulent charges on our customers’ cards? We have upgraded our ATMs to accept chip cards.
—
by
It theoretically is possible that ATM users would sue your bank after a data breach stemming from a skimmer installed on one of your ATMs, but it is difficult to predict the chances of such a lawsuit hitting your bank, not to mention estimating the potential liability and costs. (An ATM skimmer is a device…