Annual or Periodic Error Notices

At least once each calendar year for each account from or to which EFTs can be made, you must mail or deliver to the consumer a notice summarizing the procedures to follow and the consumer’s rights in the event of a billing error. [12 CFR 1005.8(b)] The text of the notice is spelled out in Appendix A to the Regulation (Model Form A-3). It matches the notice required on the initial disclosure. As an alternative to sending the notice out once each calendar year, you can choose to send it on or with each periodic statement. [12 CFR 1005.8(b)] If you choose this alternative, the language of the notice changes slightly. As we pointed out, with respect to the notice on the initial disclosure, you should generally use the exact language of the notice as it appears in the model form. Certain changes are permitted (deleting inapplicable provisions, substituting trade names, adding state law or private rule (like VISA or MasterCard) provisions more protective of the consumer, referring to extended time periods for EFTs in or out of new accounts, or point-of-sale and foreign-initiated transactions), but we would not advise deviating from the language of the model form very much. [Commentary, Appendix A, paragraph 3] Be aware that a reference to extended time periods for EFTs in or out of new accounts is not necessary on the annual or periodic error notices, though a reference is required on the initial Regulation E disclosure in order to take advantage of the longer time period. [Commentary, 12 CFR 1005.8(b)-2]

You have an option with respect to the annual error notice if the account is a payroll card account. You can either (1) send an annual notice with special language appropriate to payroll card accounts or (2) include a different notice with its own special language along with the electronic or written histories that you provide to the consumer. [12 CFR 1005.18(c)(2)] See the language in Appendix A, paragraph A-7(b) and A-3(b) for the special language.

See the earlier section in this chapter entitled “Special rules for electronic disclosures” for details on sending this notice by electronic communication.