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#1935888 - 06/26/14 07:52 PM M Card: Change Notice Required?
Deedoubleu Offline
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Is a change notice required for the Mastercard zero liability changes? I have a vendor calling me saying we need new brochures and to send a change notice (which they will gladly supply). My brochure does not refer to zero-liability, is this necessary or are they looking to make some money?

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#1936127 - 06/27/14 03:31 PM Re: Change Notice Required? Deedoubleu
BrianC Offline
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Since Zero Liability is a contractual provision in your debit card agreement, it is a contract law issue, not a compliance issue.

MasterCard does require the disclosure of its Zero Liability protections in your cardholder agreement so at the very least, your agreement will need to be updated when the new Zero Liability provisions go into effect in October 2014.

As far as notifying your existing cardholders of the change, the bank should discuss with legal council the appropriate means of notifying customers of the new contract terms to ensure that the method(s) used comply with contract laws in your state.

(For example, check to see if a statement message or stuffer would do the job to help save on postage/printing costs.)
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#1936418 - 06/27/14 08:07 PM Re: Change Notice Required? Deedoubleu
Deedoubleu Offline
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Thanks Brian.

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#1937700 - 07/03/14 02:57 PM Re: Change Notice Required? Deedoubleu
lmaizel Offline
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Ohio
Brian,

Should a bank have a separate MasterCard Debit Card agreement for both consumer and small business debit card holders?

Thanks,
Lynn

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#1937731 - 07/03/14 03:37 PM Re: Change Notice Required? Deedoubleu
BrianC Offline
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It is a wise practice to have separate agreements. If you provide a consumer card agreement to a small business client, you will contractually obligate yourself to provide all of the Reg E protections to the business customer even though Reg E does not apply to business accounts.
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#1938255 - 07/07/14 08:53 PM Re: Change Notice Required? Deedoubleu
Seven11Eleven Offline
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We also had a vendor call about the same thing....

Our card agreement is basic, primarily referring to the terms and conditions of the bank's EFT disclosure. The EFT disclosure has a MasterCard Debit Card section explaining liability "when used for point-of-sale transactions"...

I do not disagree that it is a contract law issue, but what if it isn't in our contract? But rather, it is in our EFT disclosure.
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#1938679 - 07/08/14 08:37 PM Re: Change Notice Required? Deedoubleu
JPJ Offline
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Iowa
Our vendor claims the cardholder reporting piece of MasterCard's new zero liability rule requires a Reg E change in terms notice. Cardholders will now be required to "promptly" report a loss or theft to be covered by the zero liability limitation. Could this really trigger a Reg E change in terms?

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#1938682 - 07/08/14 08:43 PM Re: Change Notice Required? Deedoubleu
manimal Offline
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The info I got from our vendor says that since the zero liability limitation is lost and defaults to the Reg. E limitation of $500, that change causes increased consumer liability. That is their reason for wanting to provide a change in terms.
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#1939586 - 07/10/14 08:22 PM Re: Change Notice Required? Deedoubleu
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I have also had a vendor call to say they can print change notices for me, but no one can point me to where this change was actually issued. Could someone please share where I can find this information from Mastercard?

Thank you!
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#1939596 - 07/10/14 08:36 PM Re: Change Notice Required? Deedoubleu
BrianC Offline
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#1939601 - 07/10/14 08:44 PM Re: Change Notice Required? Deedoubleu
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Thanks Brian!
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#1939604 - 07/10/14 08:47 PM Re: Change Notice Required? Deedoubleu
manimal Offline
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Thanks for the link!
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#1939621 - 07/10/14 09:08 PM Re: Change Notice Required? Deedoubleu
BrianC Offline
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I'm a little confused with the change notice requirement as it relates to Reg E. The current Zero Liability Website states "If you have questions regarding Zero Liability coverage or you suspect unauthorized use of your card, contact your bank IMMEDIATELY."

It also states that one of the reasons to disqualify Zero Liability protections is failure to "exercise reasonable care in safeguarding your card from loss or theft;" Many institutions consider the failure to promptly notify the institution of a lost/stolen card to be a failure to exercise reasonable care and have withheld Zero Liability for this reason.

I see the change to add PIN based transactions to Zero Liability to be to the consumers benefit, not detriment.
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#1939725 - 07/11/14 01:42 PM Re: Change Notice Required? BrianC
E. Lavenza Offline
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We use a forms vendor thats combines the EFT disclosure with the MasterCard information into the same customer document. Because a few of the changes have negative customer impact, and because we did disclose the MasterCard $50, I think we now need a change of terms under Reg E. Can anyone confirm?
Specifically:
• The new rule eliminates the $50 liability limitation that applies under the current MasterCard rule if the conditions for zero liability aren’t met. So, under the revised rule if the conditions for zero liability are not met (for instance, because the cardholder did not promptly report the loss) the Reg. E limitations will apply instead of the current $50 MasterCard limitation. Under Reg. E the cardholder could have up to $500 liability if the loss is not reported within 2 days of discovery, or unlimited liability if the unauthorized transaction is not reported within 60 days of when the unauthorized transaction was reported on a periodic statement. (Negative change for card holders)
Thank you!

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#1939813 - 07/11/14 03:25 PM Re: Change Notice Required? Deedoubleu
manimal Offline
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^^^ That's the same reason our vendor gave us for the change. We are doing the change notice.
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#1939854 - 07/11/14 04:03 PM Re: Change Notice Required? Deedoubleu
ahou Offline
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What is consider "prompt" under the Mastercard zero liability rules? (we issue Visa cards)
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#1939870 - 07/11/14 04:31 PM Re: Change Notice Required? Deedoubleu
BrianC Offline
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E. Lavenza. That's the piece I was missing. MasterCard's press release did not say anything about eliminating that clause. That being the case, I agree a change notice would be required under Reg E.

ahou, MasterCard does not specify what is considered "prompt." Check with bank counsel, but many institutions elect to define "prompt" in their agreements (such as two business days after discovering the loss or theft) so that they have a contract that defines the period of time.
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#1940901 - 07/15/14 02:19 PM Re: Change Notice Required? Deedoubleu
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That's the piece I am missing as well. I have an email from our forms vendor stating this change, but cannot find anything else that describes those effects. When I questioned the vendor, they said it was in a bulletin from Mastercard but I am not seeing those changes.
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#1940911 - 07/15/14 02:26 PM Re: Change Notice Required? Deedoubleu
manimal Offline
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Did you ask your vendor to send you the communication they got from MC? Maybe they could share the bulletin they referenced.
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#1940943 - 07/15/14 02:46 PM Re: Change Notice Required? Deedoubleu
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Yes, and they said a bulletin issued May 2014. Maybe I am overlooking something and am just not seeing the changes spelled out. We don't have a rep with Mastercard, we go through our core system vendor. We tried contacting our card rep there and they had not heard of the change. I just want to make sure all of my ducks are in a row before we order a ton of these notices/disclosures!
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#1940947 - 07/15/14 02:47 PM Re: Change Notice Required? Deedoubleu
manimal Offline
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I'd ask them to send it to you. Then you can show it to your MC rep and ask them about it if needed.
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#1940976 - 07/15/14 03:14 PM Re: Change Notice Required? Deedoubleu
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I did and all they would say is a bulletin in May. I'm going to try our card rep again just to doublecheck. I appreciate your advice!
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#1941021 - 07/15/14 03:49 PM Re: Change Notice Required? Deedoubleu
manimal Offline
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Ugh. That's so frustrating when they won't share, it's just "Take our word for it." Hopefully your MC rep can help.
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#1941059 - 07/15/14 04:45 PM Re: Change Notice Required? Deedoubleu
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Exactly! I asked for a sample of what they are going to send to our customers when I order and they won't even provide that. So they want me to order all of the notices and will not even share what it's going to say.
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#1941354 - 07/15/14 10:14 PM Re: Change Notice Required? Deedoubleu
Sunshine Lady Online
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Below is

Press Releases

MasterCard Strengthens U.S. Cardholder Security




Purchase, N.Y. – May 28, 2014 – MasterCard today announced enhancements to its industry leading security efforts, providing U.S. cardholders with greater protection from fraud and identity theft.

“Fraud prevention and detection is a 24/7 job at MasterCard. The changes that we’re making in cardholder protection combined with our efforts to move the U.S. payments industry to EMV chip technology will help deliver safer shopping experiences to consumers,” said Chris McWilton, president, North American Markets for MasterCard.

All MasterCard credit, debit, prepaid and small business cards issued in the U.S. will now carry Identity Theft Resolution assistance. The program provides help in canceling missing cards and alerting credit reporting agencies, as well as targeting searches to detect if stolen personal and confidential data appears online.

MasterCard is also extending its zero liability policy in the U.S. to include all MasterCard PIN-based and ATM transactions. This is in addition to coverage already provided on signature debit and credit transactions. Cardholders will have greater peace of mind knowing that they are protected if their MasterCard-branded consumer or small business cards are fraudulently used in stores, online or at ATMs.

“Cardholder protection is a primary responsibility for payment networks. It’s a positive step that MasterCard is offering increased protections and peace of mind to its cardholders as the U.S. market prepares for EMV,” said Nick Holland, Senior Payments Analyst, Javelin Strategy & Research.

Banks and financial institutions issuing MasterCard-branded cards provide financial indemnity against fraud. The Identity Theft coverage extension begins in July 2014.The Zero Liability coverage extension takes effect in October 2014.

MasterCard and EMV

MasterCard continues to help strengthen the U.S. payment system for consumer and merchants by driving the move to EMV technology.

The U.S. card market is currently adopting newer chip card technology. Computer chips embedded in credit and debit cards generate dynamic and unique codes for each purchase, making it more difficult to steal data or create counterfeit cards. Chip technology is currently used in Asia, Canada and Europe and has reduced fraud in all of these markets.

For more, general information about chip cards, please visit our “Six Things to Know About EMV” blog post. For specific information about your card, please contact the bank or credit union listed on the back of your existing card.

About MasterCard

MasterCard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardNews, join the discussion on the Cashless Pioneers Blog and subscribe for the latest news on the Engagement Bureau.
the press release from MasterCard. Hope it helps.
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