Credit Balance Exceeding One Dollar; Periodic Statement Disclosure; Contents

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Section 22. Whenever a credit balance equal to or in excess of one dollar 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 otherwise owed to or held for the benefit of an obligor, 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 remaining 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 remaining in the account for more than six months, within thirty days after the expiration of the six-month period, except that no further action is required 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. Any creditor who does not make such a good faith effort to refund the credit balance, as required hereby, shall pay to the customer interest thereon at the annual percentage rate of eighteen per cent.

In addition, the creditor of any open-end-credit plan shall disclose to the customer, in the periodic statement for the billing cycle at the end of which a credit balance first occurs and is due and owing to the customer, the amount of such credit balance. Unless the credit balance is previously reduced to less than one dollar by refunds or other charges to the account, the creditor shall further disclose, in at least two additional periodic statements for billing cycles within the six-month period following the closing of the billing cycle in which the credit balance first occurs and is due and owing to the customer, any credit balance equal to or in excess of one dollar at the end of such billing cycles.

The creditor of such account shall clearly and conspicuously disclose to the customer in the periodic statement or in a statement accompanying the periodic statement for either the billing cycle in which the credit balance first occurs and is due and owing the customer or the next succeeding billing cycle the following information to the extent applicable:

(a) The amount of the credit balance at the end of the applicable billing cycle; (b) That such credit balance represents money owed to the customer; (c) That the customer has the right to make charges against such credit balance or to obtain a cash refund of such balance upon request; (d) That the creditor will refund, within thirty days after the expiration of the foresaid six-month period, the amount then remaining in such credit balance, if no charge has been made against such credit balance, and a refund has not been requested and the amount of such credit balance is then in excess of one dollar. If the creditor discloses the credit balance more than once, the additional disclosures shall also be made in at least one other periodic statement or in a statement accompanying another periodic statement for a billing cycle within the aforesaid six-month period.


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