ABA Bank Compliance - November/December 2010

believe that your materials are easy to understand and that your programs, products, services, and fees are described accurately? If not, revise your materials so that in the opinion of the consumer, your materials are easy to understand and accurate and do not “over-deliver.” If it is not possible to disclose all relevant or required information in all media, disclose this fact in all media. In addition, regardless of medium, fully disclose the risks associated with the program, product, or service, along with a source for additional information for the consumer. 39 By creating a more consumer-friendly culture as suggested, your organization can help enhance consumer understanding and reduce UDAP claims involving your organization.

■ ■ review third-party service provider-related policies,
standards, practices, and agreements. Do the policies,
standards, and practices of your organization address marketing
requirements and prohibitions, prohibited practices, monitoring,
and security? Does your organization complete due diligence
regarding third parties and their capabilities? Have screening
and sourcing been leveraged to support such efforts? Is the third
party located in the United States or overseas? If overseas, has
your organization adopted additional requirements? Have you
reviewed and paid special attention to contractual arrangements,
including insurance, to help reduce risk? Do you audit or other-
wise regularly monitor and review the facilities and practices of
third-party service providers? Equally important, do you regularly
review marketing and promotional materials used by third-party
service providers? 40 Third parties—whether telemarketers, payment
processors, or other providers, and whether or not they directly
support advertising or marketing functions—are subject to the
same review and held to the same standard as are banks, with
additional penalties and fees likely applicable. 41

Conclusion

By incorporating these recommendations into business planning and program, product, and services development, and by otherwise following up on these suggestions, your organization can better address UDAP-related risks in the face of regulatory change and uncertainty. ■

About the Author

CoURtne Y eDen is a graduate of the American Bankers Association National Compliance School and a licensed attorney. Her firm experience includes litigation before federal courts and administrative agencies, including related appeals; the negotiation of international and domestic agreements; and related regulatory matters. She has worked in the financial services industry for several years and regularly supports clients in several business lines, including related coordination with compliance and business risk departments. Reach her at (804) 592-9600 or via e-mail at courtneyeden@yahoo. com.

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