1026.12 - Special CC Provisions Flashcards
Issuance of Credit Cards
** Applicable to business/agri/comm**
No card shall be issued to any person unless in response to an explicit oral or written request; or as a renewal or substitute card
Variances
- Does not have to be same name of card, but same product, can have new features
- Requests for card can be made prior to issuance of new program
Authorized Users
Only primary accountholders can add authorized users and request cards on their behalf. AUs cannot be held liable for unauthorized use, not even $50.
Non-Credit Card Issuance (other than prepaid)
Can issue cards not considered for “credit” so long as they do not provide access to a credit plan. (e.g., purchase price discount card)
Definition of Renewal
Issuing due to systemic adjustment, standard renewal of exp. date, security reasons, renewal of cards tied to suspended accounts,
Substitution definition
Card name change, changed the card or features of the card, successor card (new bank), substitution of non-card related credit plan,
One-for-one Rule
Cannot replace one credit card with two unless it’s related to another bank product (i.e., debit, prepaid)
Liability of Unauthorized Use
Total liability for unauth. use cannot exceed the lesser of $50 or the amount of fraud.
- Only applicable to use of card, not checks (not same for billing error)
Conditions of Liability
- Credit card is accepted card
- Issuer has provided adequate notice of CH’s potential liability and details of liability limitations
Authorized Users and Robbery
- CH liable for any authorized user poor use unless CH has requested AU be restricted/removed from account.
- Cards possessed via robbery and then used count as unauth. use.
Claims and Defenses
When person who honors card won’t resolve matter dealing with quality/receipt of goods and/or services, customer can attempt to have matter resolved through issuer. Customer can withhold payment w/o negative reporting
Exclusions
- AH is same as issuer or controlled by issue
- Franchised of issuer
- Cash advances or overdraft credit plan
Claim Limitations
- Claim must be more than $50
- Disputed transaction must have occurred within either the same state or within 100 miles of AH.
- AH must have made good faith attempt to resolve with company
Amt Eligible to Be Disputed C&D
Cannot exceed credit outstanding at time issuer is notified by AH but payments must still be treated toward non-disputed balance.
Hybrid Prepaid Card
Purchases used from a prepaid hybrid that has access to covered credit plan are covered by C&D.O
Offset Prohibition
Issuer cannot, before or after a termination, offset a debt by leveraging a deposit acct (including prepaid) w/o state or federal laws that provide for acting on a security interest or obtain court order to go after funds.
Also cannot place freeze or hold on acct
Offset also applies toward funds intended for deposit or prepaid
Deductions from Deposit
If agreed to by AH in writing, issuer can deduct from deposit acct periodically (once per month generally), subject to limitations of billing error res.
Prompt Notification of Returns
- Notification of returned merch or service should be sent to issuer within 7 days
- Issuer should credit acct within 3 days (does not have to be posted)
Discounts/Tie-in Arrangements
Issuer cannot prohibit honor of card from offering discounts if AH pays via other method. Also cannot require honor to open account for condition of participation
