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FOS Blog

02 Oct

Website Terms of Use Agreement….Is it Just Another Disclosure?

Website Terms of Use Agreement….Is it Just Another Disclosure?

Many have opined that, if it’s not a reg, then we aren’t doing it!  Good news is there is no regulation per se to require this agreement.  Bad news is that although there is no regulation, the very essence of all that this is regulatory is risk management.  Risk management is a broad and pervasive topic and turning a blind eye to it can result in pernicious outcomes!  So what are these perils and how can a Bank mitigate the risks associated with its website?  The website terms of use agreement basically:

  • Establishes ownership of the Bank’s website content.   The Bank’s website is an important part of its brand and operations. The Bank is typically the owner of its logo, domain and IP address as well as website content and design, etc.  If you are using a third party provider or web hosting arrangement, make sure you understand your ownership rights.  Most agreements include an Intellectual Property Clause that informs the user of any copyright, trade mark or other Intellectual property rights including trademarked products and services.
  • Prevents abuses by acting as a legally binding contract between the Bank and the users of the website. It sets the rules that must be followed and agreed to in order to access and use the website, mobile site, etc.  It should also address equipment and printing requirements. This is in addition to the privacy policy concerning how the Bank collects and uses information from its customers and visitors to the sight.
  • Establishes the laws and jurisdiction governing the website.  This defines the geographic area over which legal authority extends as well as the authority to hear and determine causes of action regarding any legal issue concerning the website’s operation.
  • Limits the Bank’s Liability for errors and omissions.  This would include a disclaimer that limits the Bank’s liability in cases of errors found on the website.  This clause notifies users that it can’t be held responsible for error in the content accuracy of information, completeness of information or any other purpose.  This is especially relevant to third party products, services and sites to which the Bank is weblinking.  Unfortunately, this would not eliminate the Bank’s liability in regard to the regulatory requirements associated with its own products and services in regard to the advertising requirements of the consumer regulations or any UDAAP concerns identified by the regulators.
  • Permits Termination of Accounts or Account Access.  This would enable the Bank to permanently or temporarily ban users for certain abuses related to use of the Bank’s website.
  • Some of these areas will vary depending on whether or not your website is informational or transactional.  In all cases, ensure that the user can affirmatively acknowledge delivery and understanding of the Terms of Use Agreement.