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EFT Agreements and Business Customers

Answered by: 
John Burnett

Question: 
I understand almost all of the consumer disclosure requirements do not apply to business customers. Would a sole proprietor or single member LLC be considered a consumer and receive a consumer EFT Agreement? We provide these business types a debit card in the individual's name.Are we required to provide business customers (corporations, partnerships, LLCs-with employees) with an EFT Services Agreement and/or an Agreement for Online Banking or Bill pay services?
Answer: 

Regulation E applies to consumer accounts, and defines them as accounts opened by individuals (not LLCs) primarily for personal, family or household purposes, not sole proprietorships.

If you want to define the terms of your EFT services for a business and assign responsibility when problems arise, you can't depend on your deposit contract or a handshake. You need some form of agreement or contract the lays out the rights, duties and responsibilities under the agreement.

First published on BankersOnline.com 8/31/09

First published on 08/31/2009

Filed under: 
Technology
Filed under technology as: 
EFT
Online Banking

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