Advertising with ATMs

Issue/Inquiry

The Bank would like to explore marketing opportunities to non-customers using its branch ATM machines, such as offering a bonus on the ATM receipt for opening an account, having its logo on the ATM, and enhancing the graphics on the ATMs. The Bank asks, “What compliance concerns should we be on the lookout for?”.

Response Summary

The Bank can use its ATMs or ATM receipts for marketing purposes, but it must bear in mind that certain disclosures must be made at ATMs or on ATM receipts, and that advertisements may also require particular information to be provided, depending on the type of advertisement.

Response Detail

Disclosures and Advertisements

In exploiting its branch ATMs for marketing purposes, the Bank will have to keep in mind two aspects concerning ATMs and advertisements:

• Disclosures required to be made at ATMs
• Disclosures required for advertisements

Disclosures Required with ATMs

With regards to required disclosures, Regulation E requires receipts at electronic terminals to provide the following information:

• Amount of transfer
• Date of transfer
• Type of transfer
• Terminal location
• Number or code identifying consumer’s account (not to exceed four digits)
• Name of any third party to or from whom funds are transferred. 12 CFR §1005.9(a).

If the Bank imposes a fee on a consumer using its ATM to complete a transaction or make a balance inquiry, Regulation E requires it to provide a notice that a fee will be imposed, either on the ATM’s screen or on paper, before the consumer is committed to paying a fee. 12 CFR §1005.16.

The Bank is also required by Regulation CC to post a notice at ATMs that funds deposited in the ATM may not be available for immediate withdrawal. 12 CFR §229.18(c).

In using the ATMs or ATM receipts for marketing purposes, the Bank must be sure that the required disclosures are clearly made and not deleted or obscured in order to advertise particular terms or to use special graphics.

Requirements for Advertisements

With regards to advertisements, a number of Federal regulations require particular disclosures to be made, depending on the type of advertisement and the information conveyed by it.

Generally, all advertising for the Bank must provide the FDIC Official Statement (e.g., “Member FDIC”) in size and print that is clearly legible, other than advertisements that are exclusively for a product or service that is not a deposit product or for an investment product. 12 CFR §328.3.

If the Bank were to use ATMs or ATM receipts to market dwelling-secured loans, it would also have to display the HUD Equal Housing Lender logotype and legend. 12 CFR §338.4.

When consumer loans are advertised, Regulation Z requires certain information to be provided. In particular, if such information as the term of the loan, the amount of any payment, or the amount of any finance charge is stated (i.e., “triggering terms”), then such information as the annual percentage rate and terms of repayment must also be stated (i.e., “triggered terms”). Other information must be provided for closed or open-end consumer loans secured by a dwelling. If an ATM receipt or screen display is used to advertise consumer loans, then care must be used as to whether triggering terms are used to describe the loan.

Likewise, Regulation DD (“Truth-in-Savings”) recognizes triggering and triggered terms in advertisements for deposits. For example, if the annual percentage yield is stated, other information, such as the effective date of the rate and the minimum balance to obtain the annual percentage yield, must also be stated, along with statements that the rate may change, if the deposit product has a variable rate, or that fees may reduce earnings on the account, if there are maintenance fees on the account. Other information or statements must be provided for time deposits, discretionary overdraft programs, or investment accounts. The Bank must keep these requirements in mind as well when using the ATM or ATM receipt to advertise deposit products.

Advertising a Bonus

Under Regulation DD, a bonus is a premium or gift worth more than $10 offered to a consumer in exchange for opening, maintaining, renewing, or increasing an account balance. 12 CFR §1030.2(f).

If a bonus for an account opening was advertised on an ATM receipt, certain information would have to appear on the receipt as applicable:

• The “annual percentage yield,” using that term, and the other terms triggered by the statement of the annual percentage yield
• The time requirement to obtain the bonus
• The minimum balance required to obtain the bonus
• The minimum balance required to open the account, if it is greater than the minimum amount required to obtain the bonus
• When the bonus will be provided. 12 CFR §§1030.8(d).

As noted, the advertisement for a deposit product must also display the FDIC Official Statement.

This entry was posted on Monday, August 10th, 2015 at 2:00 pm.