15 U.S.C. § 1666f — Inducements to cardholders by sellers of

Page 1542 TITLE 15—COMMERCE AND TRADE § 1666d 1 So in original. Probably should be preceded by ‘‘a’’. AMENDMENTS 2010—Subsec. (a). Pub. L. 111–203, § 1100A(2), sub- stituted ‘‘Bureau’’ for ‘‘Board’’. See Codification note above. 2009—Pub. L. 111–24, § 104(1), substituted ‘‘Prompt and fair crediting of payments’’ for ‘‘Prompt crediting of payments’’ in section catchline, designated existing provisions as subsec. (a), and inserted subsec. (a) head- ing. Subsec. (a). Pub. L. 111–24, § 104(2), (3), inserted ‘‘, by 5:00 p.m. on the date on which such payment is due,’’ after ‘‘in readily identifiable form’’ and substituted ‘‘manner, and location’’ for ‘‘manner, location, and time’’. Subsecs. (b), (c). Pub. L. 111–24, § 104(4), added subsecs. (b) and (c). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the des- ignated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. EFFECTIVE DATE OF 2009 AMENDMENT Amendment by Pub. L. 111–24 effective 9 months after May 22, 2009, except as otherwise specifically provided, see section 3 of Pub. L. 111–24, set out as a note under section 1602 of this title. § 1666d. Treatment of credit balances Whenever a credit balance in excess of $1 is created in connection with a consumer credit transaction through (1) transmittal of funds to a creditor in excess of the total balance due on an account, (2) rebates of unearned finance charges or insurance premiums, or (3) amounts other- wise owed to or held for the benefit of an obli- gor, the creditor shall— (A) credit the amount of the credit balance to the consumer’s account; (B) refund any part of the amount of the re- maining credit balance, upon request of the consumer; and (C) make a good faith effort to refund to the consumer by cash, check, or money order any part of the amount of the credit balance re- maining in the account for more than six months, except that no further action is re- quired in any case in which the consumer’s current location is not known by the creditor and cannot be traced through the consumer’s last known address or telephone number. (Pub. L. 90–321, title I, § 165, as added Pub. L. 93–495, title III, § 306, Oct. 28, 1974, 88 Stat. 1514; amended Pub. L. 96–221, title VI, § 621(a), Mar. 31, 1980, 94 Stat. 184.) Editorial Notes AMENDMENTS 1980—Pub. L. 96–221 substituted provisions relating to duties of creditor whenever a credit balance in excess of $1 is created in connection with a consumer credit transaction, for provisions relating to duties of creditor whenever an obligor transmits funds to creditor in ex- cess of the total balance due on an open end consumer credit account. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–221 effective on expiration of two years and six months after Mar. 31, 1980, with all regulations, forms, and clauses required to be pre- scribed to be promulgated at least one year prior to such effective date, and allowing any creditor to com- ply with any amendments, in accordance with the regu- lations, forms, and clauses prescribed by the Board prior to such effective date, see section 625 of Pub. L. 96–221, set out as a note under section 1602 of this title. § 1666e. Notification of credit card issuer by sell- er of return of goods, etc., by obligor; credit for account of obligor With respect to any sales transaction where a credit card has been used to obtain credit, where the seller is a person other than the card issuer, and where the seller accepts or allows a return of the goods or forgiveness of a debit for services which were the subject of such sale, the seller shall promptly transmit to the credit card issuer, a credit statement with respect thereto and the credit card issuer shall credit the ac- count of the obligor for the amount of the trans- action. (Pub. L. 90–321, title I, § 166, as added Pub. L. 93–495, title III, § 306, Oct. 28, 1974, 88 Stat. 1514.) § 1666f. Inducements to cardholders by sellers of cash discounts for payments by cash, check or similar means; finance charge for sales transactions involving cash discounts (a) Cash discounts With respect to credit 1 card which may be used for extensions of credit in sales trans- actions in which the seller is a person other than the card issuer, the card issuer may not, by contract or otherwise, prohibit any such seller from offering a discount to a cardholder to in- duce the cardholder to pay by cash, check, or similar means rather than use a credit card. (b) Finance charge With respect to any sales transaction, any dis- count from the regular price offered by the sell- er for the purpose of inducing payment by cash, checks, or other means not involving the use of an open-end credit plan or a credit card shall not constitute a finance charge as determined under section 1605 of this title if such discount is offered to all prospective buyers and its avail- ability is disclosed clearly and conspicuously. (Pub. L. 90–321, title I, § 167, as added Pub. L. 93–495, title III, § 306, Oct. 28, 1974, 88 Stat. 1515; amended Pub. L. 94–222, § 3(c)(1), Feb. 27, 1976, 90 Stat. 197; Pub. L. 97–25, title I, § 101, July 27, 1981, 95 Stat. 144.) Editorial Notes AMENDMENTS 1981—Subsec. (b). Pub. L. 97–25 substituted ‘‘With re- spect to any sales transaction, any discount from the regular price offered by the seller for the purpose of in- ducing payment by cash, checks, or other means not in- volving the use of an open-end credit plan or a credit card shall not constitute a finance charge as deter- mined under section 1605 of this title if such discount is offered to all prospective buyers and its availability is disclosed clearly and conspicuously’’ for ‘‘With re- spect to any sales transaction, any discount not in ex- cess of 5 per centum offered by the seller for the pur- Page 1543 TITLE 15—COMMERCE AND TRADE § 1666i pose of inducing payment by cash, check, or other means not involving the use of a credit card shall not constitute a finance charge as determined under sec- tion 1605 of this title, if such discount is offered to all prospective buyers and its availability is disclosed to all prospective buyers clearly and conspicuously in ac- cordance with regulations of the Board’’. 1976—Subsec. (a). Pub. L. 94–222 temporarily des- ignated existing provisions as par. (1) and added par. (2). See Termination Date of 1976 Amendment note below. Statutory Notes and Related Subsidiaries TERMINATION DATE OF 1976 AMENDMENT Section 3(c)(2) of Pub. L. 94–222, as amended by Pub. L. 95–630, title XV, § 1501, Nov. 10, 1978, 92 Stat. 3713; Pub. L. 97–25, title II, § 201, July 27, 1981, 95 Stat. 44, pro- vided that: ‘‘The amendments made by paragraph (1) [amending this section] shall cease to be effective on February 27, 1984.’’ NULLIFICATION OF BOARD RULES AND REGULATIONS UNDER SUBSECTION (b) OF THIS SECTION IN EFFECT ON JULY 26, 1981 Pub. L. 97–25, title I, § 103, July 27, 1981, 95 Stat. 144, provided that: ‘‘Any rule or regulation of the Board of Governors of the Federal Reserve System pursuant to section 167(b) of the Truth in Lending Act [subsec. (b) of this section], as such section was in effect on the day before the date of enactment of this Act [July 27, 1981], is null and void.’’ § 1666g. Tie-in services prohibited for issuance of credit card Notwithstanding any agreement to the con- trary, a card issuer may not require a seller, as a condition to participating in a credit card plan, to open an account with or procure any other service from the card issuer or its sub- sidiary or agent. (Pub. L. 90–321, title I, § 168, as added Pub. L. 93–495, title III, § 306, Oct. 28, 1974, 88 Stat. 1515.) § 1666h. Offset of cardholder’s indebtedness by issuer of credit card with funds deposited with issuer by cardholder; remedies of credi- tors under State law not affected (a) Offset against consumer’s funds A card issuer may not take any action to off- set a cardholder’s indebtedness arising in con- nection with a consumer credit transaction under the relevant credit card plan against funds of the cardholder held on deposit with the card issuer unless— (1) such action was previously authorized in writing by the cardholder in accordance with a credit plan whereby the cardholder agrees pe- riodically to pay debts incurred in his open end credit account by permitting the card issuer periodically to deduct all or a portion of such debt from the cardholder’s deposit ac- count, and (2) such action with respect to any out- standing disputed amount not be taken by the card issuer upon request of the cardholder. In the case of any credit card account in exist- ence on the effective date of this section, the previous written authorization referred to in clause (1) shall not be required until the date (after such effective date) when such account is renewed, but in no case later than one year after such effective date. Such written authorization shall be deemed to exist if the card issuer has previously notified the cardholder that the use of his credit card account will subject any funds which the card issuer holds in deposit accounts of such cardholder to offset against any amounts due and payable on his credit card account which have not been paid in accordance with the terms of the agreement between the card issuer and the cardholder. (b) Attachments and levies This section does not alter or affect the right under State law of a card issuer to attach or otherwise levy upon funds of a cardholder held on deposit with the card issuer if that remedy is constitutionally available to creditors gen- erally. (Pub. L. 90–321, title I, § 169, as added Pub. L. 93–495, title III, § 306, Oct. 28, 1974, 88 Stat. 1515.) Editorial Notes REFERENCES IN TEXT For effective date of this section, referred to in sub- sec. (a), see Effective Date note set out under section 1666 of this title. § 1666i. Assertion by cardholder against card issuer of claims and defenses arising out of credit card transaction; prerequisites; limita- tion on amount of claims or defenses (a) Claims and defenses assertible Subject to the limitation contained in sub- section (b), a card issuer who has issued a credit card to a cardholder pursuant to an open end consumer credit plan shall be subject to all claims (other than tort claims) and defenses arising out of any transaction in which the cred- it card is used as a method of payment or exten- sion of credit if (1) the obligor has made a good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction from the person honoring the credit card; (2) the amount of the initial transaction exceeds $50; and (3) the place where the initial transaction occurred was in the same State as the mailing address previously provided by the cardholder or was within 100 miles from such ad- dress, except that the limitations set forth in clauses (2) and (3) with respect to an obligor’s right to assert claims and defenses against a card issuer shall not be applicable to any trans- action in which the person honoring the credit card (A) is the same person as the card issuer, (B) is controlled by the card issuer, (C) is under direct or indirect common control with the card issuer, (D) is a franchised dealer in the card issuer’s products or services, or (E) has obtained the order for such transaction through a mail solicitation made by or participated in by the card issuer in which the cardholder is solicited to enter into such transaction by using the cred- it card issued by the card issuer. (b) Amount of claims and defenses assertible The amount of claims or defenses asserted by the cardholder may not exceed the amount of credit outstanding with respect to such trans- action at the time the cardholder first notifies the card issuer or the person honoring the credit