Question: We have recently implemented a business check card. We currently have small business customers
with our consumer check card. We’d like to convert these business customers to the business check card automatically with no notice. Do we need to have the business customer complete a new application for the business check card or can we automatically send them
the new business card?
Answer: To reduce your liability, you do not want to send a “live” card, especially if the business is not
expecting it. While Reg. E doesn’t apply to business accounts, you would certainly be liable for withdrawals taken by an access device that was neither requested nor expected.
Is the account classified on your system as a business account? If not, you will have to provide a change in terms notice if the terms are different in a way adverse to the customer.
As a practical matter, you may want to contact your customers by letter, letting them know that as of a certain date you will no longer be honoring debit card transactions on the business account that are made with their current consumer check card. If they wish
to have a check card that will continue to be effective, they can instead switch to the new business check card. Then disclose to them its terms and features and the process by which they should indicate their desire to have one. For customer satisfaction, you certainly want to disclose liability and fee changes to avoid problems later.
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