Or. Admin. Code § 177-040-0052

Current through Register Vol. 63, No. 10, October 1, 2024

Section 177-040-0052 - Non-Sufficient Funds

(1) Definitions: For purposes of this rule:

(a) "Working day" means a weekday (Monday through Friday) from 8 a.m. to 5 p.m. when Lottery Headquarters is open for business.

(b) "NSF" means non-sufficient funds.

(2) Retailers with Temporary Contract or Letter of Authority: If an electronic funds transfer (EFT) from a retailer with a temporary contract or a letter of authority issued under ORS 461.335 is not completed due to NSF in the retailer's EFT account, and non-payment is not excused under this rule, the Lottery shall terminate the retailer's temporary contract or letter of authority, and disable or remove Lottery equipment from the retailer's premises. Processing of the retailer's application for a retailer contract otherwise may proceed.

(3) First NSF: The first time that a Lottery retailer's EFT payment to the Lottery is not completed due to NSF in the retailer's EFT account, the Lottery shall:

(a) Notify the Retailer: Make a reasonable effort to notify the Lottery retailer of the NSF;

(b) Disable Equipment: Disable the Lottery's equipment on the retailer's premises for up to five working days, in which time the retailer must pay, by certified funds, the EFT transfer amount plus an additional $50 fee for the Lottery's administrative expenses in processing the NSF;

(c) Withhold Bonus: Withhold any bonus and incentive payments the retailer may have earned for the business week in which the NSF occurs. If the retailer does not make the required payments within five working days of the date the equipment was disabled, the retailer shall forfeit the bonus and incentive payments; and

(d) Terminate Contract: Terminate the retailer's contract and remove the Lottery's equipment if the retailer fails to pay, by certified funds, the EFT transfer amount plus the $50 fee within five working days of the date the equipment was disabled.

(4) Second NSF: When a retailer's EFT payment is not completed to the Lottery due to NSF in the retailer's EFT account for a second time within 12 months of the retailer's first NSF, the Lottery shall:

(a) Notify the Retailer: Make a reasonable effort to notify the Lottery retailer of the NSF;

(d) Bond/Cash Deposit: The Lottery shall require the retailer to post:

(A) Cash: A cash deposit by certified funds; or

(B) Bond: A bond issued by a surety company or companies holding a certificate of authority to transact surety business in the State of Oregon and approved by the Director. The Director shall determine the amount, the term, and any other applicable conditions of the bond.

(C) The amount of the bond or cash deposit will be no less than twice the retailer's weekly average EFT transfers, calculated using the immediately preceding three calendar months.

(D) The bond must remain in effect until the Lottery determines that it is no longer necessary. The Lottery will hold the cash deposit until the Lottery determines that it is no longer necessary.

(e) If the retailer fails to pay, by certified funds, the EFT transfer amount plus the $50 fee within five working days of the date the equipment was disabled, or fails to post a bond or make a cash deposit within five working days of the date the equipment was disabled the retailer contract shall be terminated.

(5) Third NSF: When a Lottery retailer's EFT payment is not completed to the Lottery due to NSF in the retailer's EFT account a third time within 12 months of the retailer's first NSF, the Lottery shall:

(a) Notify the Retailer: Make a reasonable effort to notify the Lottery retailer of the NSF;

(c) Forfeit Bonus: Require the retailer to forfeit any bonus and incentive payments the retailer may have earned for the business week in which the NSF occurs; and

(d) Terminate Contract: Terminate the retailer's lottery contract and remove the Lottery's equipment if the retailer fails to pay, by certified funds, the EFT transfer amount plus the $50 fee within five working days of the date the equipment was disabled.

(6) Fourth NSF: When a Lottery retailer's EFT payment is not completed to the Lottery due to NSF in the retailer's EFT account a fourth time within 12 months of the retailer's first NSF, the Lottery shall:

(a) Notify the Retailer: Make a reasonable effort to notify the Lottery retailer of the NSF.

(b) Disable Equipment: Disable the Lottery's equipment on the retailer's premises until the contract is terminated and the equipment is removed.

(c) Payment: Require the retailer to pay, by certified funds, the amount of money that was to be paid by EFT plus the $50 fee within five working days of the date the Lottery equipment on the retailer's premises was disabled.

(d) Forfeit Bonus: Require the retailer to forfeit any bonus and incentive payments the retailer may have earned for the business week in which the NSF occurs.

(e) Terminate Contract: Terminate the retailer's lottery contract and remove the Lottery's equipment.

(7) NSF Due to Financial Institution Error: Any NSF that is due to an error committed by the retailer's financial institution will not be treated as an NSF under this rule as long as the error is corrected and Lottery receives documentation within seven working days from the NSF from the retailer's financial institution. The financial institution must substantiate to the Director's satisfaction the financial institution's responsibility for causing the NSF, and that but for the financial institution's error, sufficient funds would have been available in the retailer's account to cover the EFT payment.

(8) Financial Institution Closures: Any NSF that is due to an unexpected temporary closure of the retailer's financial institution will not be treated as an NSF under this rule as long as the NSF is corrected and Lottery receives documentation within seven working days from the NSF from the retailer's financial institution that substantiates to the Director's satisfaction the reason for the financial institution's unexpected closure. The retailer shall make the deposit before 5 p.m. of the next day the financial institution is open or available for deposits to be made. If the deposit is not made as described, the Lottery shall treat it as an NSF under these rules.

(9) Retailer's Obligations Survive Contract Termination: Termination of the retailer's contract does not release the retailer from any obligation to pay all amounts due the Lottery under this rule and the retailer's Lottery contract. The Lottery may make a claim upon any bond, or cash deposit posted under this rule, and apply the money to any of the retailer's obligations owed to the Lottery. The Lottery may initiate collection action on behalf of the State to collect all amounts due.

(10) Director's Discretion: The Director may make exceptions to these requirements based upon the facts and circumstances of any particular payment by a retailer which is rejected for NSF.

Or. Admin. Code § 177-040-0052

LOTT 11-2002(Temp), f. 9-6-02, cert. ef. 9-9-02 thru 3-6-03; LOTT 22-2002, f. & cert.. ef. 11-25-02; LOTT 3-2004(Temp), f. & cert. ef. 4-6-04 thru 10-1-04; LOTT 6-2004, f. & cert. ef. 5-26-04; LOTT 12-2008, f. 12-23-08, cert. ef. 1-1-09; LOTT 4-2018, temporary amend filed 05/08/2018, effective 05/09/2018 through 11/02/2018; LOTT 7-2018, amend filed 08/30/2018, effective 8/31/2018; LOTT 7-2022, amend filed 07/29/2022, effective 8/1/2022; LOTT 3-2023, amend filed 08/31/2023, effective 9/1/2023

Statutory/Other Authority: Or Const, Art XV, § 4(4)(a), ORS 461.120, 461.130, 461.150 & 461.300

Statutes/Other Implemented: Or Const, Art XV, §4(4), ORS 461.120, 461.130, 461.150 & 461.300