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ICBA Bancard Services

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ICBA Bancard, Inc.

Fraud Loss Protection Plan Terms and Conditions

(Effective November  1, 2017)

Purpose: 

In consideration of the payment of your monthly Plan fee, ICBA Bancard agrees to relieve you as a participating bank in ICBA Bancard’s Fraud Loss Protection Plan (“FLPP”) of responsibility for certain losses arising from the fraudulent use of Credit or Debit Cards (“Cards”) you have issued through the ICBA Bancard program.   

ICBA Bancard’s Fraud Loss Protection Plan covers the following: 

  •  Lost Cards  
  •  Stolen Cards 
  •  Cards Not Received in the Mail (NRI)  
  •  Counterfeit Cards (including Skimmed Counterfeit Cards)   
  •  Account Takeover Cards (including Identity Theft, Phishing, Pharming, Vishing) 
  • Card Not Present (CNP) 

ICBA Bancard’s Fraud Loss Protection Plan coverage does not extend to:    

  • Fraudulent Card Applications   
  • Credit Losses   
  • Bankruptcies   
  • Non-EMV Card fraud (effective Jan. 1, 2018) 

ICBA Bancard’s Fraud Loss Protection Plan coverage applies to the fraudulent use of Cards to obtain:  
  

  • Currency  
  • Coins   
  • Bank notes   
  • Travelers checks   
  • Money orders
  • Similar written promises to pay for the purchase or lease of goods or services except when the following occurs: 
 
  1. The participant can legally obtain reimbursement from Cardholder, Cardholder Family Members, merchants, financial institutions, Card associations or clearing houses representing you. 
      
  2. The loss resulted from a Card issued without an application other than the replacement of a Card previously issued by you.   

  3. The loss resulted from uncollected interest or discounts.   

  4. The loss resulted from the use of the Card to guarantee the cashing of a check or draft.
       
  5. The loss resulted from the fraudulent, dishonest or criminal acts of one or more of your officers, directors or employees. 

  6. The loss resulted from the use of a genuine Card issued by you to an authorized person using his or her genuine signature with intent to defraud.   

  7. The loss resulted from the use of a Card by a Family Member or relative of a Cardholder, without the filing of a criminal incident report against the Family Member(s). Or the loss resulted from friendly fraud, whereby the cardholder provided their PIN number and/or authorization for transaction(s) and subsequently disputes charges as fraudulent.
     
  8. The loss is consequential rather than direct, including but not limited to interruption of business, delay or loss of market, cost of replacing or reissuing such Cards, and/or cost of notice to or remedial actions by Cardholders not directly affected by the fraud.  Remedial actions by Cardholders includes, but is not limited to, remedial actions by Cardholders based on a merchant’s decision to decline a Card transaction. 

  9. The loss resulted from the complete or partial non-payment of, or default upon, any loan or transaction in the nature of, or amounting to, a loan made by or obtained from you; and/or   

  10. The loss was not discovered prior to the cancellation of this agreement or the fraudulent use occurred subsequent to the term of the FSA Agreement.  

  11. Losses resulted from the issuing of Cards without CVV or CVC coding, or losses resulted from authorized transactions in which CVV or CVC was not verified. 
     
  12. Losses resulted from Card transactions without Card expiration and Card account number verification.  

  13. Losses exceed the Limits of Coverage noted below.    

  14. Losses resulted from a participating bank that had not enrolled in an available Card Activation Program prior to the date the fraud loss occurred. 
     
  15. Losses resulted from employee fraud on Business Cards that are embedded in a consumer portfolio.     

  16.  Associated fraud losses are related to an account that has been placed in a VIP status. 
     
  17.  Card fraud transactions occur outside of current Card Association (Visa / MasterCard) Chargeback time limits.   
       
  18.  Losses resulting when the Card transaction fails authentication by the Platform (defined below) and the merchant continues the transaction utilizing the Card.   

Term of Agreement   

This Agreement will begin on the first day of the month immediately following your service charge payment and will automatically renew for one (1) year terms.  
 
Limits of Coverage

Your responsibility for covered losses is waived provided that in the 12-month calendar year they do not exceed: 

Per Account Limit: $10,000 per account 
   
Annual Limit: $200,000 per bank   

Maximum Annual Payout: $1,500,000 to all participating banks 

Annual limits are based on all paid fraud losses that occurred in a twelve (12) month calendar year.  Once the Annual Limit per bank or Maximum Annual payout are reached in a calendar year, no additional claims will be paid. In ICBA Bancard's sole discretion, it may adjust the Limits of Coverage on an annual basis. Limits and deductibles are reviewed annually by an independent Actuary and approved by ICBA Bancard’s Board of Directors.

Deductible Amounts 

Non-business Card (Consumer) eligible losses are subject to a $750 per account deductible, plus a copayment of 50% for all losses more than $750 up to the next $2,000 of eligible losses. Thereafter, 100% of the claim is paid up to the maximum $10,000 per account limit.     

Business Card eligible losses are subject to a $750 per account deductible, plus a co-payment of 50% for all losses more than $750 up to the maximum $10,000 per account limit.
    
Deductibles and co-payments are considered part of the $10,000 per account limit. 

(NOTE: Employee fraud on Business Debit and/or Credit Cards that are embedded in a consumer portfolio is not covered.)   

Cost

The cost for participation in this Fraud Loss Protection Plan consists of an implementation fee of $250.00 (if you accept the Plan upon execution of your contract with ICBA Bancard), plus $0.125 per Credit Card account on file with ICBA Bancard, or $0.065 per Debit Card on file, at the end of each month of coverage.   

Protection Plan Requirements and Obligations   

  1. Membership Requirement: Each Plan Participant must be an eligible ICBA member in good standing. ICBA membership must be maintained at all times. If a Plan Participant's ICBA membership is terminated or dropped, all claim processing for the Plan Participant will be suspended until membership is reestablished. 
      
  2. Processor Requirement: Each Plan Participant must use one or more of ICBA Bancard’s Preferred Vendor Processors as their Card processor(s), and all Card transactions must reside on and process through the respective processing platform(s) of the Preferred Vendor Processors to be eligible for coverage.

  3. Parameter Review: Each Plan Participant must review their card portfolio parameters every two (2) years. 
     

  4.  Loss Recovery: Each Plan Participant must use commercially reasonable efforts to preserve any right of recovery available. If ICBA Bancard makes a payment under this Agreement, that right of recovery will belong to Bancard. If Bancard recovers more than it has paid, the excess will belong to the Plan Participant that incurred the loss after Bancard deducts its expenses in obtaining the recovery. 
     

  5. Card Activation System: Each Plan Participant is required to enroll in the most current Card Activation Program available through its Card processor(s). 

  6. Neural Network System: Each Plan Participant must employ the most current version of its Card processor(s) fraud detection neural network platform. 
          

  7. Authentication Service: Each Plan Participant shall enroll in a risk-based e-Commerce Authentication Service. All required documentation must be completed and submitted within 30days of new “Plan” enrollment. 
      

  8. BIN / Plan Changes: All BIN and Plan Range additions or deletions of must be reported to ICBA Bancard’s risk team at BC3DSecure_Support@icba.org within 30-days.

  9. Electronic Warning Bulletin (EWB): Each Plan Participant must list all Card account numbers connected to their submitted fraudulent claim(s) on the Visa and MasterCard “warning” file for a period not less than 90 days.
       

  10. Claim Reporting Obligations: Each Plan Participant shall report Card losses to the System to Avoid Fraud Effectively (“SAFE”) no later than thirty (30) days after discovery. All Card issuers are required to report fraudulent transactions to SAFE at least monthly. An online ICBA Bancard Member Loss Reporting Data Sheet shall be completed and submitted as soon as possible, but no later than nine (9) months after the first date of fraud. All claims shall include all required documentation necessary for processing. Any claim submitted later than nine (9) months after discovery will be denied. 

For each claim, Plan Participant agrees to supply Bancard with all requested documentation which may include the following:  
 
  • Detailed written Cardholder description of how the loss occurred 
  • Police report (for Card losses resulting from a stolen Card)
  • Transaction receipt(s) or a list of exact transactions representing the reported loss amount 
  • Documentation from all parties notified regarding the loss (Cardholder notifications, Participant notifications, etc.) 
  • Cardholder(s) credit/debit Card limit(s) 
  • All other reasonable request for documentation that will allow Bancard’s Claims Representative to process claims.  
  • Cardholder(s) credit/debit Card limit(s) 
  • All other reasonable request for documentation that will allow Bancard’s Claims Representative to process claims.  
      11. Compensation Obligations: ICBA Bancard shall review and either approve or disapprove claims within sixty (60) days from receipt of a
            complete claim packet. ICBA Bancard shall pay approved claims within fifteen (15) days of approval.

      12. Notification of Program Changes: Plan Participants will be notified of any amendment or modification to the FLPP
            no later than forty-five (45) days prior to the effective date of such amendment or modification. 
  
      13. Program Implementation/Cancellation or Program Termination: “Plan” coverage will begin upon receipt and acceptance of a fully executed
            FLPP amendment. “Plan” Participants may cancel coverage, by submitting written notice to ICBA Bancard’s Risk Team on appropriate 
            
company letterhead. The cancellation shall be effective on the last day of the calendar month immediately
            following the month in which the notice was submitted. ICBA Bancard will not accept new claims for all card fraud activities after
            the cancellation  date.  Plan"  Participants that discontinue the ICBA Bancard program will not have card losses covered after the deconversion
            date

 
 All FLPP charges will be discontinued after the termination month and/or deconversion month. No additional fraud claims will be accepted beyond ninety (90) days from the termination and/or deconversion month. 

 ICBA Bancard may in its sole discretion cancel this participation agreement with sixty (60) days prior written notification to the Plan Participant.

Program Definitions

Account Takeover: The result of an unknown or unauthorized person impersonating a legitimate Card owner with the intent of taking over the account. 
   
Business Card: A Card issued in the name of a business.   

Bankruptcy: The judicial act of declaring a person insolvent and subject to having his or her estate administered under the bankrupt laws for the benefit of creditors.  
 
Card: Any eligible debit or credit Visa or MasterCard enrolled in the Fraud Loss Protection Plan.   

Card Activation Program:  Program, which requires legitimate Card owners to call a toll-free, 24-hour staffed telephone number to validate their Cards prior to first use.  
 
Card Not Received (NRI): A new Card or reissued Card that the legitimate Card owner has not received.   

Card Verification Value (CVV - Visa)/Card Verification Code (CVC - MasterCard): A unique check value encoded on the Magnetic Stripe of a Card used to validate Card information during the Authorization process.   

Card Verification Value2 (CVV2 - Visa)/Card Verification Code2 (CVC2 - MasterCard): A unique 3digit check value generated using a secure cryptographic process that is indent-printed on the back of the Card.  
 
Cardholder: The authorized signer who has been issued a debit or credit card.   

Chip Card: A Card plastic that has an electronic chip implanted into it that allows the Card to perform certain functions, such as storage, financial transactions, and heightened security authorization; also known as a smart Card or memory Card.   
 
Close-out Packet: Documentation gathered and provided by the processor or accessed and put together by the bank in connection with a fraud loss. This packet is required when submitting a loss claim.   

Counterfeit Card: A Card or convenience check that has been fraudulently printed, embossed, or encoded to appear as a genuine Card.   

Credit Card: A Card, with a credit limit used to purchase goods and services, or obtain cash advances on credit and issued by an ICBA Bancard covered participant which is processed by a preferred vendor.     

Credit Loss: The amount lost because of a Cardholder’s non-payment of the amount owed on the account.   

Debit Card: A Card, used to purchase goods and services and to obtain cash, which debits the Cardholder’s personal demand deposit account (DDA) and issued by an ICBA Bancard covered participant; which is processed by a preferred vendor.      

EMV: Europay, MasterCard and Visa (“EMV”) which set rules to ensure global acceptance and security standards for Chip Cards and their authorization worldwide.   

Family Member: The spouse, child, spouse's child, daughter-in-law, son-in-law, brother, sister, mother, father, grandparents, grandchild, step-brother, step-sister, step-parents, parents-in-law, brother-in-law, sister-in-law, aunt, uncle, niece, nephew, guardian, domestic partner, or ward of an individual Cardholder. 
 
Fraudulent Application: An application containing false information for obtaining a Card.    

Fraudulent Use: Unauthorized use of any lost Card, stolen Card; including Not Received Issued, Account Takeover and Counterfeit Cards issued by a participant bank which results in an unpaid debit.  
 
Friendly Fraud: Fraud committed by someone who knows the victim personally, often times by family or friends. Or a cardholder that makes a legitimate purchase with his / her own credit card and then issues a chargeback after receiving the goods or services. 
 
FSA Agreement: The Financial Services Agreement between ICBA Bancard and a Plan Participant. 
 
2IDENTIFI Universal Platform: The Platform is a Cardinal Commerce Corporation product, provided as a hosted service, from a PCI-DSS1 certified data center.  The Platform will enable ICBA Bancard to provide Verified by Visa and MasterCard Secure Code Authentication Services to “Plan” Participants.   
 
Member Loss Reporting Form: The online form required for completion by the Plan Participant, which is used when submitting a fraudulent claim loss to ICBA Bancard.    NFC: Near Field Communication (“NFC”) a set of standards for mobile devices to establish radio communication by close proximity to perform a payment.  
 
Preferred Vendor: A company or servicing entity that is contracted by ICBA Bancard at special negotiated pricing.  
 
Preferred Vendor Processor: A Processor that has become a Preferred Vendor. 
 
Processor: A member, or Visa / MasterCard, or a Visa / MasterCard-approved non-member acting as the agent of a member, which provides authorization, clearing, or settlement services for member clients and merchants.   

Pharming: Tampering with the domain-name server system so that traffic to a website is secretly redirected to a fraudulent site even though the browser seems to be displaying the web address of the correct site.   

Phishing: The process of attempting to acquire sensitive information such as usernames, and Credit Card details by masquerading as a trustworthy entity via email communication.   

Plan Participant: An ICBA Bancard participant that is enrolled in the Fraud Loss Protection Plan.   

Skimmed Counterfeit: The replication of full track 1 and track 2 data from a valid Card to allow valid authorizations to occur.   

Vishing: The criminal practice of using social engineering over the telephone system, most often using  features facilitated by Voice over IP (“VoIP”), to gain access to private personal and financial information.