Several clauses designed to protect consumers
More updates are coming to the Consumer Financial Protection Bureau’s (CFPB) prepaid rule that’ll govern the use of payroll cards.
The rule creates provisions to protect employees in case pay chards are lost or stolen. It also puts procedures in place to correct and guarantees free access to account info.
Back in April, the CFPB delayed the rule’s implementation until April 1, 2018.
Now, in its latest proposal, the agency has added additional requirements for error resolution, liability limits and more.
In the original rule, all consumers with prepaid accounts, including pay cards, would automatically receive full protection from fraud or errors. This included the ability to dispute charges or recover stolen funds.
However, due to concerns from the industry, the CFPB proposed a change to this requirement. Only consumers who register and verify their prepaid accounts would have access to these protections. And financial institutions wouldn’t have to limit consumers’ liability if their accounts weren’t verified and registered.
However, if a person’s prepaid account was verified after it had been created, all protections would apply as of the account’s effective date. So consumers would still have the right to dispute any prior transactions or recover losses from fraud.
Should this change go into effect, Payroll needs to make sure employees are aware of the guidelines when issuing pay cards.
Besides this update, the proposal includes provisions to make it easier for consumers to link digital wallets (which store financial info for online purchase) to traditional credit cards are involved, it might be a good idea to pass this info on to employees.
Also, be aware: Because of these and other changes, the CFPB is considering pushing the effective date of the rule back even further.
More info tinyurl.com/rule537