The Federal Reserve Board (FRB) announced an amendment to the fraud-prevention adjustment provisions of Regulation II’s debit card interchange fee standards. When Reg. II was initially released in July 2011, the section addressing this adjustment was issued as an interim final rule.
To be eligible for the adjustment of no more than one cent per transaction, an issuer must develop and implement policies and procedures reasonably designed to take effective steps to reduce the occurrence of, and costs to all parties from, fraudulent electronic debit transactions, including developing and implementing cost-effective fraud prevention technology.
According to the Board’s press release, the final rule simplifies the elements required to be included in the issuer’s fraud prevention policies and procedures, which now must address:
- Methods to identify and prevent fraudulent electronic debit transactions;
- Monitoring volume and value of its fraudulent electronic debit transactions;
- Appropriate responses to