EFT Reg E Flashcards
With one exception, the following transactions are considered electronic funds transfers for purposes of Regulation E. Which transaction is NOT considered an EFT?
a. Withdrawing cash from a checking account through an ATM
b. Paying for groceries through a POS debit of funds from a checking account
C. Transferring funds from a savings account to a checking account at an ATM
d. Transferring funds from a savings account to a checking account by the customer’s telephone call to a bank officer and asking for the funds to be transferred
d. Transferring funds from a savings account to a checking account by the customer’s telephone call to a bank officer and asking for the funds to be transferred
First National Bank is expanding its deposit services and would like to send out debit cards to a group of its customers. However, these cards have not been requested by the customers and the bank does not want to violate Regulation E. How can First National accomplish this?
a. No cards may be sent except in response to a request. The bank must send letters soliciting a request for the cards.
b. Cards may be sent if they are not validated, if disclosures of consumer’s rights are enclosed, and if the card can only be validated by a request from the consumer with proper identification.
c. No cards may be sent and no direct solicitation for cards may be made. The bank must rely on general advertising
d. Ready-to-use cards may be sent to the customers provided proper disclosures of the consumer’s rights are included along with a notice that use of the card will validate it for all purposes.
b. Cards may be sent if they are not validated, if disclosures of consumer’s rights are enclosed, and if the card can only be validated by a request from the consumer with proper identification.
The consumer protections of Regulation E cover which of the following transactions?
a. A wire transfer made through the Fedwire system by Bill Rogers to make his mortgage payment
b. A $250 automatic transfer made from Ben Stillwater’s checking account to his savings account at the same institution
c. The check Mrs. Flower gave to the dress shop for her daughter’s prom dress and used by the shop to collect information to send a one-time ACH debit to Mrs. Flower’s account pursuant to a notice posted in the dress shop
d. The $175 loan payment made by Juan Pena to First National by depositing it in one of the bank’s ATMs
c. The check Mrs. Flower gave to the dress shop for her daughter’s prom dress and used by the shop to collect information to send a one-time ACH debit to Mrs. Flower’s account pursuant to a notice posted in the dress shop
Marion Evans’s bank debit card is stolen on March 1, a Tuesday. On March 2, $100 is taken from her account with the card. She notices that her card is missing from her purse on March 3 and begins a search for the card. On March 6, another $100 is taken from her account. On March 8, $500 is taken from her account. On March 10, she notifies the bank. For how much of the amount taken can Marion be held liable?
a. $500
b. $600
C. $100
d. $50
a. $500
Mr. Edwards has a First National Bank debit card. The card allows him to withdraw funds from his checking account to pay for goods or services by using major credit card networks. Providers of services that accept MasterCard or VISA will accept Mr. Edwards debit card. Mr. Edwards travels often. In March, while at home, he reviews his checking account statement and notices three ATM transactions whereby funds were debited from his account using the debit card. The transactions were made in San Diego during February. Mr. Edwards never went to San Diego. None of his family members have debit cards. He called the bank and asked to be reimbursed for the $750 that was taken from his account but not authorized by him. What may the bank do?
a. Point out to him the language in his account agreement where he agrees to be liable for all withdrawals, whether or not authorized, and tell him that they will not credit his account for the funds
b. Tell him that they will investigate, and the funds should be credited within 20 business days
c. Provisionally credit the account within 10 business days and take up to 45 days to investigate the unauthorized debit
d. Provisionally credit the account within 20 business days
c. Provisionally credit the account within 10 business days and take up to 45 days to investigate the unauthorized debit
Mrs. Walters uses her ATM card each week to withdraw cash. To remember her access code, she writes it on the card in permanent ink. On March 1, her card is stolen. On March 2, $500 is taken from her account. On March 3, she notices the card is missing and notifies the bank the same day. Later on March 3, another $100 is taken from her account. For how much of the loss is Mrs. Walters liable?
a. - $50
b. $600, because she was negligent in writing her access code on the card
c. $100
d. $500, because she was negligent in writing her access code on the card
a. - $50
Jonathan Fry’s debit card is stolen on October 1, and $100 is taken from his account on October 2. Jonathan notices that his card is missing on October 5. On October 8, $100 is taken from his account. On October 10, the bank sends his monthly statement on the account, showing the two unauthorized transfers. On November 3, $500 is taken from his account. On November 10, another statement on the account is mailed, showing the November 3 unauthorized transfer. On December 5, another $100 is taken from his account. On December 10, the bank sends the monthly statement on the account, showing the December 5 unauthorized transfer. On December 15, Jonathan notifies the bank of the card’s loss. For how much of the loss is Jonathan liable?
a. $700
b. $500
c. $600
d. $250
b. $500
Under Regulation E, which of the following pieces of information must be included on an ATM receipt?
a. The account balance
b. The location of the terminal
C. The time of day the transfer occurred
d. The fact that the transaction will overdraw the account
b. The location of the terminal
Which of the following pieces of information must be included on a periodic statement according to Regulation E?
a. The financial institution’s business days
b. The name of any third party to whom funds were transferred
c. A summary of the consumer’s liability for unauthorized transfers
d. The balance in the consumer’s account after each transfer
b. The name of any third party to whom funds were transferred
First National Bank investigated Mr. Gilbert’s allegation of a $500 EFT error. The bank provisionally credited the account during the investigation. The bank determined that no error was made and notified Mr. Gilbert on April 5 of the results of the investigation. On April 6, the bank debited Mr. Gilbert’s account for $500, which before this debit had a balance of $700. On April 7, checks for $600 and $800 are presented for payment against the account, payable to third parties. On April 8, Mr. Gilbert comes into the bank to withdraw $100. What should First National do?
a. Return both the $600 and the $800 checks and honor the cash withdrawal
b. Pay both checks and honor the cash withdrawal
c. Pay the $600 check, honor the cash withdrawal, and return the $800 check
d. Pay the $600 check, refuse the cash withdrawal, and return the $800 check
d. Pay the $600 check, refuse the cash withdrawal, and return the $800 check
First National Bank received a notice from James Gilbert that a $500 electronic withdrawal from his checking account, which was shown on his monthly statement, appeared to be an error. What must First National do?
a. Investigate the error and make any corrections within 30 calendar days
b. Provisionally credit Mr. Gilbert’s account for the $500, notify Mr. Gilbert of the credit, investigate the error, and make any corrections within 10 business days
c. Provisionally credit Mr. Gilbert’s account for the $500 within 10 business days, notify Mr. Gilbert of the credit, investigate the error within 45 calendar days, and make any necessary corrections within 1 business day
d. Provisionally credit Mr. Gilbert’s account for the $500 within 10 business days, investigate the error, notify Mr. Gilbert of the credit, and make any corrections within 30 calendar days
c. Provisionally credit Mr. Gilbert’s account for the $500 within 10 business days, notify Mr. Gilbert of the credit, investigate the error within 45 calendar days, and make any necessary corrections within 1 business day
If provisional credit is made to a customer for an alleged error on an ATM cashbwithdrawal, Regulation E requires a bank to determine whether an error has occurred and to notify the customer NO LATER THAN how many days after the bank receives notice of the alleged error?
a. 10 business days to investigate plus 3 business days to notify the customer
b. 10 calendar days to investigate plus 3 business days to notify the customer
c. 45 business days to investigate plus 3 business days to notify the customer
d. 45 calendar days to investigate plus 3 business days to notify the customer
d. 45 calendar days to investigate plus 3 business days to notify the customer
Under Regulation E, when a bank imposes a change that increases fees or charges related to electronic fund transfers, or restricts availability of electronic transfers, it must provide notice to its customers. How many days in advance of the change must the bank notify customers?
a. 10
b. 15
c. 21
d.30
c. 21
Regulation E disclosures must FIRST be provided to an EFT customer either at the time the account is opened or at what other time?
a. With the first periodic statement
b. Before the first EFT occurs
c. Within three business days of opening the account
d. Within three business days of receiving the customer’s request for EFT services
b. Before the first EFT occurs
A customer calls to notify the bank that a withdrawal made at an ATM located in a local supermarket has been debited from the wrong account. The bank employee applies the POS error resolution procedures. What should the bank do?
a. Ask the supermarket to credit the customer’s account
b. Freeze the customer’s account until the problem can be resolved
c. Retrain the employee to distinguish POS transactions from ATM transactions
d. Provide immediate credit, and file a SAR
c. Retrain the employee to distinguish POS transactions from ATM transactions
