I never paid attention to this underlined section in the commentary before,


So the way that is worded it seems it me that a preauthorized debitcard transaction is not the same as a one-time POS transaction. Does that mean a preauthorized debitcard transaction is not considered a one-time POS under the Reg.E opt-in requirements? My deposit ops dept. wants to think so since they have to manually code all of these transaction to not charge the customers who have not opted-in. Doesn't make sense to me since these are the force pay transactions the regulators are all in a tizzy about, but want to check to make sure I didn't miss something.

A recurring debit card transaction would be a monthly magazine subscription, an insurance premium, a health club membership. There should be no manual coding if these. If your debit card processor and core support it, there should be a Tran code that identifies these recurring charges for which you can charge a fee even without an opt in.

Thanks Brian. I get there are recurring transactions, but I can't explain to Deposit Services why the commentary makes the distinction for preauthorized transactions and states "a one-time OR a preauthorized". We have 3 tran codes: 1- POS debit, 2- POS Preauthorized, and 3- POS Recurring, but I've always assumed the POS Preauthorized are one time debits which are covered by the opt-in rules, but now that one little sentence in the commentary is making me question it.

Visa/MC require all debit card purchases to be “preauthorized” meaning the merchant must authorize a purchase against the cardholders available balance prior to submitting the charge against the account. Without knowing how your system works my speculation would be that POS debit is a PIN based purchase, preauthorized is signature based and recurring is signature based for a recurring charge. The recurring would be the only debit card transaction for which you can charge a fee without an opt in.

That was my thought as well. They are both one-time debitcard transactions. Only ones labeled ars recurring are not protected by Reg.E. Thank you for you expertise.

As defined in Reg E, a preauthorized EFT is an EFT "authorized in advance to recur at substantially regular intervals." That's why "preauthorized" and "recurring" are found in the same sentence.