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#2249050 - 02/10/21 09:14 PM Refer a Friend Program
Compnerd Offline
Junior Member
Compnerd
Joined: Oct 2011
Posts: 30
Ada, OK
Does anyone have any experience with "Refer a Friend" Program and vendors who offer these services to Banks. My first reaction is no, run for the mountains, but I want to keep an open mind and see if this is doable in a compliant manner. Here are the concerns I have come up with:
[list]
1. Privacy concerns - If the email or alert goes from the Bank vs the friend to the friend. If
2. Conditioning a referral fee on an account being opened and in good standing for 60 days, activity on the account such as ACH, eStatements, debit card transactions and so on that will qualify the friend for the referral fee.
3. Sharing and inviting friends via Social Media to open an account via a link.
4. Do we need to offer a "Special Account" set up for Referrals to make sure the features align with the T&C.
5. Will the risk be reduced if we just based a flat referral fee or a store Gift Card for simply referring a friend. No conditions attached.

Thank you!

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#2249071 - 02/11/21 01:55 AM Re: Refer a Friend Program Compnerd
Inspector Offline
Gold Star
Joined: Apr 2016
Posts: 290
I think tying the referral bonus to account activity isn't a good idea. The referring friend isn't going to able to control another person's account activity and they won't know if the other person is meeting the requirements until you don't give them the bonus and then they are annoyed.
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Opinions expressed are my own and do not reflect legal advice or the opinions of my employer.

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#2249086 - 02/11/21 02:52 PM Re: Refer a Friend Program Inspector
Compnerd Offline
Junior Member
Compnerd
Joined: Oct 2011
Posts: 30
Ada, OK
Exactly! Thanks for your input.

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#2252005 - 04/07/21 09:40 PM Re: Refer a Friend Program Compnerd
IronP2717 Offline
100 Club
Joined: Feb 2018
Posts: 147
We're running this same type of program.

The vendor is debating that the certificate received by the referring customer and referred new customer doesn't meet the Reg DD bonus definition or disclosure requirements b/c the marketing materials don't mention opening a specific account product; only that upon opening any new checking both parties receive a certificate redeemable for a gift card or other rewards.

I've reviewed Reg DD definitions for advertisement and bonus and 1030.8 and the Official Interpretations for all. I'm interpreting the Reg to mean the $25 gift is a bonus and the bonus disclosure has to be made.

Am I overlooking something or misinterpreting Reg DD?

We're already working through a solution for possible privacy concerns, so I'm not concerned with that piece of it at the moment.
Last edited by IronP2717; 04/07/21 09:42 PM.
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#2252015 - 04/08/21 11:51 AM Re: Refer a Friend Program Compnerd
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 85,064
Galveston, TX
When someone shows up to open an account - how do you know they have been referred?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2252071 - 04/08/21 09:16 PM Re: Refer a Friend Program Compnerd
IronP2717 Offline
100 Club
Joined: Feb 2018
Posts: 147
Customer requests a referral code to give to their friends. Friend comes in with that code at account opening. After acct is opened they each receive a certificate to be redeemed for a gift card or other “reward” of their choice

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#2252160 - 04/11/21 12:14 PM Re: Refer a Friend Program Compnerd
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 85,064
Galveston, TX
I open an account - I do not get a gift card. I open an account with a code - I get a gift card. I am getting the gift card for having the code and not opening the account.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2252217 - 04/12/21 05:17 PM Re: Refer a Friend Program rlcarey
IronP2717 Offline
100 Club
Joined: Feb 2018
Posts: 147
Randy,
Is your interpretation that the Reg DD bonus doesn't apply b/c it's not provided for all account openings?

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#2252269 - 04/13/21 12:04 PM Re: Refer a Friend Program Compnerd
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 85,064
Galveston, TX
Well, they have a code they get the gift if they don't, they don't. So, what are you paying them for? Having the code or opening the account.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2287253 - 08/01/23 10:03 PM Re: Refer a Friend Program Compnerd
mtngrrl Offline
Platinum Poster
mtngrrl
Joined: Mar 2011
Posts: 508
Northern California
Picking up this old thread, because I can't find anything newer. I'm trying to figure out how banks are getting around the privacy issues with refer-a-friend. In a recent meeting, someone brought up this type of program, and when I said it was a privacy can of worms, they said, "how is everyone else doing it"? I have been searching the web, and indeed I find a TON of banks doing it, and from comments here it seems there might be solutions to help implement it, but I haven't found them. Can anyone shed light on how newer solutions/vendors might be solving the privacy issue?
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Be kind; everyone you meet is fighting a hard battle.
--all opinions are my own--

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#2287270 - 08/02/23 01:39 PM Re: Refer a Friend Program Compnerd
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 85,064
Galveston, TX
I hand out 10 refer-a-friend coupons and $10 shows up in my account. How do I know what friend opened an account. Plus, the customer opening the account gave you the coupon. Usually there is some disclaimer on the coupons regarding: By presenting this coupon - blah blah blah - talk to your legal counsel if you have a real concern. Usually, they both get a spiff of some sort.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2299038 - 07/05/24 10:31 PM Re: Refer a Friend Program Compnerd
Mel in WA Offline
Diamond Poster
Joined: Mar 2013
Posts: 1,322
My bank wants to try this 'refer a friend' thing. The referrer will be providing the referee's name and email address to start the registration process.

My question is related to including an unsubscribe/opt-out link. While this is not a marketing solicitation from the bank and therefore not subject to CAN-SPAM, I feel like the friend/referee should be given the opportunity to unsubscribe/opt-out. The person who was referred may not want to be contacted by the bank.

Thoughts??

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#2299039 - 07/06/24 11:27 AM Re: Refer a Friend Program Compnerd
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 85,064
Galveston, TX
"While this is not a marketing solicitation from the bank and therefore not subject to CAN-SPAM,"

I do not understand this statement. If someone has referred them and you are sending them an e-mail inviting them to apply for whatever service they are being referred for, how is that not marketing?
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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