VISA and MasterCard Notice and Opt-Out Disclosure | Wolters Kluwer
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VISA and MasterCard Notice and Opt-Out Disclosure

  • Until recently, card issuers could optionally participate in the VISA/MasterCard updater services. However, both companies are now requiring card issuers to participate in their updater services.

    There do not appear to be any specific laws or private rules governing these updater services or providing guidance on whether a notice and/or opt out should be sent to cardholders. The scope of Regulation E is limited to electronic funds transfers. Similarly, the online VISA and MasterCard rules do not provide any express requirements or guidance relating to notification or opt-out.

    However, basic principles of fairness suggest that institutions should provide cardholders with a notification and/or an opt-out. Some cardholders may not want their information automatically updated with the merchant and may find it misleading to have the institution automatically provide merchants with updates without letting cardholders know and/or have an option to opt out of the service.

     

    Opt-out Disclosure

    We have created a Notice and Opt-Out disclosure (CARD-OPT-OUT) for the Visa and MasterCard updater services.

    • The CARD-OPT-OUT – is a menu disclosure that includes a brief description of the service and explains the cardholder’s right to opt-out of the VAU/ABU service, and describes the opt-out process. The disclosure also explains whether, if the cardholder opts out of the VAU/ABU service, whether the cardholder can subsequently opt back in to the VAU service, and it describes the process to opt back in if that is offered by the institution.

    Options:

    • To include a clip-off opt-out election, which the cardholder can complete, clip off, and return to the institution to inform the institution that the cardholder opts out of the Updater service.
    • To include an effective date for mailing to existing customers.

     

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