21-Day Notice for Changes in Terms and Conditions
Question
It must provide in writing to consumer at least 21 days before the effective date of any change in a term or condition disclosed in the initial disclosure statement if the change results in:
" Increased fees
" Increased liability for the consumer
" Fewer types of available EFTs
" Stricter limitations on frequency or dollar amount of EFTs
What is it?
Answers
Explanations
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A. B. C. D.A
The correct answer to this question is A. Change-in-terms notice.
A Change-in-terms notice is a written communication provided to the consumer by a financial institution at least 21 days before the effective date of any change in a term or condition disclosed in the initial disclosure statement. This notice is required by Regulation E, which implements the Electronic Fund Transfer Act (EFTA).
The purpose of the Change-in-terms notice is to inform the consumer of any changes to the terms and conditions of their account related to electronic fund transfers (EFTs), such as changes to fees, liability, types of available EFTs, or limitations on frequency or dollar amount of EFTs.
The notice must provide the consumer with a clear and conspicuous disclosure of the changes in a manner that the consumer can understand. Additionally, the notice must inform the consumer of their right to cancel the EFT service without penalty if they do not agree to the changes.
It is important to note that the financial institution must provide the notice at least 21 days before the effective date of the change. If the consumer receives the notice after the effective date of the change, they may have the right to receive restitution for any fees or charges that resulted from the change.
In summary, a Change-in-terms notice is a written communication required by Regulation E to inform consumers of any changes to the terms and conditions of their account related to electronic fund transfers, and to provide consumers with the opportunity to cancel the EFT service without penalty if they do not agree to the changes.
