We would like to place the change notice on our statements, does anyone know where I can find sample verbiage to use?

Has anyone here has seen an actual copy of the bulletin referenced by the vendor described above (the email everyone is talking about appears to be from the same company). The press release from MasterCard confirms the extension of Zero Liability to PIN-based ATM and POS transfers, but I can find no independent corroboration of the other two changes referenced in the vendor's email (changed reporting duty and elimination of the $50 limit when conditions aren't met), and, like others, cannot find a copy of any revised rule from MasterCard.

MasterCard published an Operations Bulletin in May 2014. If you are a primary member of MasterCard, you can access their bulletins at MasterCard Connect. If you are a sponsored member, your card processor that sponsors you should have access to these materials.

Does anyone have the verbiage on what exactly we have to disclose to the customer as far as Reg E goes?

Remember that this change is MasterCard changing their liability rules to match Reg E rules.

There is a section on our Reg E disclosure under "unauthorized transfers" for MasterCard debit cards that will require this change.

Our core processor issues our MC Debit Cards and, I will check with them but, I bet that initial "terms and conditions" disclosure sent with new cards will be updated somewhere in the process of the card issuing to reflect the proper verbiage without me having to do anything.

Now, with all that said, I too would like some sample verbiage for a statement message or statement insert to send to our customers 21 days prior to the changes (Reg E rules).

This is what I am looking for as well.

The MasterCard change, as far as I know, is not matching Reg E rules. They are extending their zero liability coverage to ATM and other PIN-based transactions. At the same time, they are imposing some restrictions on the zero liability coverage that might be considered more onerous to the consumer.

For the latter change, you will need to provide a notice, and would most likely "soften" it with info on the expanded coverage.

You will also have to bring your account disclosures under 1005.7(b)(1) up to date.

Thanks John for clearing that up...either I didn't understand what my forms vendor was telling me or they told me wrong.

Am I right in understanding that since the new MasterCard rule eliminates the $50 consumer liability and if the zero liability conditions are not met then the Reg E rules would kick in thus the consumer could have up to $500 liability?

My vendor provided me the bulletin (I had to request it of course but I don't know how to attach a document to a post.

Right, as far as you went, but if the consumer doesn't get around to notifying you until after the 60-day period starting with the sending of the statement showing the first unauthorized transaction, the cap is off, and the customer is responsible for all the transactions occurring after the end of that 60-day period. [1005.6(b)(3)]

This is my first stab at the change of terms notice.
Any thoughts or suggestions:


Notice of Change to MasterCard Rules found in the Electronic Funds Transfer Disclosure
The new MasterCard liability rules make the following revisions effective October 17, 2014:
• The zero liability rule will now apply to all transactions conducted with a MasterCard branded card, including PIN-based transactions at Point of Sale and ATM. Previously , zero liability only applied to Point-of- sale Transactions.
• A cardholder will not be liable for any unauthorized transaction, as long as the cardholder has exercised reasonable care in safeguarding the card from risk of loss or theft, and, upon becoming aware, promptly reporting the loss or theft to the issuer. Previously, if the above conditions were not met your liability was the lesser of $50 or the amount of property, labor or services obtained by the unauthorized use prior to your notification to us. This maximum of $50 has been removed.

My supervisor would like to post something only on our website for the MC liability change. I don't think that is sufficient. I would think at least a statement stuffer is required to our entire consumer debit cardholder base. Thoughts?

The notice of change in terms must be in writing in a form the customer can keep. That includes a letter or a notice, statement notice, statement stuffer. Posting to a website is not sufficient.

Great! Thank you!

And here comes VISA...

Zero Liability Extended to U.S. Visa ATM Transactions

Effective 17 October 2014, the Visa International Operating Regulations will be updated to extend Zero Liability coverage to U.S. ATM transactions sent over the Visa and Plus networks.

The U.S. Zero Liability Program was introduced in 1997 to protect cardholders against fraudulent use of their Visa cards. Over the years, the program has played a significant role in improving customer confidence in the safety and security of Visa payments. Currently, the Visa Zero Liability policy applies to Visa Consumer Credit, Consumer Debit, Small Business, Prepaid and PIN (Interlink and PIN-authenticated Visa Debit) transactions.

Although Visa does not require issuers to inform cardholders of this change, the Zero Liability policy is consistently considered one of the most appealing cardholder benefits, and Visa encourages issuers to actively promote Zero Liability to maintain cardholder trust in Visa payments.

Does this apply to Mastercard branded credit cards? Are change in terms required for them?

We received the bulletin from our vendor as well. Since this applies to PIN and ATM transactions, I was only thinking about Reg E disclosures. However, you could also use your credit card at an ATM to obtain cash with a PIN (cash adavance). I called both Mastercard and our Vendor and they both confirmed it applies to debit and credit cards. They said to check with our compliance department to see if disclosures are needed.

And of course, now I am really confused because I thought this only applied to Reg E, not the Liability under Reg Z and disclosures.

Any idea?

[s]RE: hsimmers - change of terms notice (above)

Our notice will look very similar. We only use MC for debit cards, but I also see that Visa has chimed in.

Important Notice to Debit card holders:
Change to MasterCard Rules found in your Electronic Funds Transfer Disclosure
The new MasterCard liability rules make the following revisions effective October 17, 2014:
• The zero liability rule will now apply to all transactions conducted with a MasterCard branded card. Previously , zero liability only applied to Point-of-sale Transactions.
• A cardholder will not be liable for any unauthorized transaction, as long as 1) the cardholder has exercised reasonable care in safeguarding the card from risk of loss or theft, and, 2) upon becoming aware, promptly reporting the loss or theft to the issuer.
Previously, if the above conditions were not met your liability was limited to a maximum of $50 for transactions conducted by the unauthorized use prior to your notification to us. This maximum of $50 has been removed.

BAI - Anything just wrong with this notice?

It applies to MasterCard branded utilities - including debit, credit and prepaid cards.

AFB @ FNB based on that, do you think that change in terms also needs to be sent to credit cards? No one seems to mention that at all.

The reason there is mass confusion: no notice or no person has specifically said "MasterCard deleted this whole section of their disclosure (which supplied the $50 maximum), and put in a very generalized statement, adding more types of transactions (good for consumers), but leaving out any kind of liability dollar amounts. Removing that cap on the consumer's liability (bad for consumers) defaults the limitation rules of what their cap should be - provided they didn't meet those two expectations and receive zero liability privilege - back to Reg E. Reg E establishes the liability as $50, up to $500, and even unlimited in one time tier."

So, previously, they established a max for the consumer. Now, they deleted the whole section and rewrote it. They only announced the good things that the new version offers, not the good things, for them, that the change took away.

Read about the time tiers under Alphabet Soup, Reg E, 1005.6 Official Interpretations - for an English version.

That's my story.

The change in terms applies to all MasterCard branded utilities -
From the bulletin:

Background
Rule 6.3—Limitation of Liability of Cardholders for Unauthorized Use of Chapter 14,
United States Region, of the MasterCard Rules, limits a MasterCard cardholder’s liability for an unauthorized transaction.
The following revisions to the rule will be effective 17 October 2014:
• The rule will apply to all transactions conducted with a MasterCard® branded card, including PIN-based transactions at the POS and ATM.
• A cardholder will not be liable for an unauthorized transaction, as long as the cardholder has exercised reasonable care in safeguarding the card from risk of loss or theft, and, upon becoming aware, promptly reporting the loss or theft to the issuer.
• The rule will continue to apply to cards issued for small business programs, but not to other commercial cards. In the case of a prepaid card, the rule applies once the cardholder’s identity has been registered with the issuer.

I think it would also include any travel cards with the Brand -because it doesn't state otherwise.

I don't think that the MasterCard liability rule can be applied to transactions that aren't handled over the MasterCard/CIRRUS/Maestro networks, even if the card initiating the transaction happens to carry a MC family bug on it.

For example, my debit card has MasterCard and NYCE bugs. If I use the card at an ATM with the NYCE logo, the transaction usually travels over the NYCE network. But if my card is stolen and used at an ATM that switches transactions to CIRRUS or MC, the unauthorized withdrawal will be covered (assuming I promptly report it) by the MC $0 liability rule. But if the thief uses the card at a machine that switches via NYCE, MC rules won't apply.

John, you just cleared up a major dilemma for me I noticed in our current language. I was miffed! Thank you, sir.

I had considered that. But the language used in the Bulletin is:
• The rule will apply to all transactions conducted with a MasterCard® branded card, including PIN-based transactions at the POS and ATM.
It seems to reference the Brand.

But since it has come up again, I just made a call to MasterCard. I have a ticket number, and I will await a response from them. I'll be sure to post it here as soon as I receive it!

Thanks you guys!

All -
Please find to follow the response I received from MasterCard this morning regarding the question - "does the new Zero-Liability rule apply to transactions processed through networks other than those operated by MasterCard?"

"Re: ##SRQ2862482## MasterCard Zero Liability

Hello Angela,

One of my colleagues asked that I answer this question. You asked if Zero Liability would apply if the transaction was processed on a different network?

YES- it would apply if processed on a different network.

Please feel free to contact me should you have any additional questions.

Kind regards,

Ben Wappelhorst
Customer Operations Specialist
MasterCard Worldwide
2200 MasterCard Boulevard
O’Fallon, MO 63368-7263

Phone: 1-800-999-0363 or 636-722-6176
Debit Support: 1-800-332-1251 or 636-722-4432"

I guess now we have an "official" answer from MasterCard.

Boy, I sure would like to read the legal analysis that MasterCard used to determine it could impose its contract provisions on a transaction that's processed entirely outside its networks.