Current through Register 1531, September 27, 2024
(1)
Data Security. DFSOs shall comply with all applicable
state and federal requirements for data security.
(2)
Protections for DFS
Accounts.
(a) Funds in DFS
Consumer accounts must either be held:
1. in
trust for the DFS Consumer in a Segregated Account; or
2. in a special purpose Segregated Account
that is maintained and controlled by a properly constituted corporate entity
that is not the DFSO and whose governing board includes one or more corporate
directors who are independent of the DFSO and of any corporation related to or
controlled by the DFSO. Said corporate entity must require a unanimous vote of
all corporate directors to file bankruptcy and must have articles of
incorporation that prohibit commingling of funds with those of the DFSO except
as necessary to reconcile the accounts of DFS Consumers with sums owed by those
Consumers to the DFSO. Said special purpose corporate entity must also be:
a. Restricted from incurring debt other than
to DFS players pursuant to the rules that govern their accounts as consumers of
DFS contests;
b. Restricted from
taking on obligations of the DFSO other than obligations to DFS players
pursuant to the rules that govern their accounts as consumers of DFS contests;
and
c. Prohibited from dissolving,
merging or consolidating with another company (other than a special purpose
corporate entity established by another DFSO that meets the requirements of
this section) while there are unsatisfied obligations to DFS players including,
without limitation, to DFS Consumers.
(b) DFSOs shall implement and Prominently
Publish procedures that:
1. Prevent
unauthorized withdrawals from DFS Consumer accounts by DFSOs or
others;
2. Make clear that the
funds in the Segregated Account do not belong to the DFSO and are not available
to creditors other than the DFS Consumer whose funds are being held;
3. Prevent commingling of funds in the
Segregated Account with other funds including, without limitation, funds of the
DFSO;
4. Establish a protocol,
consistent with
940 CMR
34.16, for responding to and reporting on
complaints by DFS Consumers that their accounts have been misallocated,
compromised or otherwise mishandled; and
5. Establish a protocol by which DFS
Consumers can withdraw funds maintained in their accounts, whether such
accounts are open or closed. Such requests for withdrawals must be honored by
the later of five business days of the request or ten business days of
submission of any tax reporting paperwork required by law, unless the DFSO
believes in good faith that the DFS Consumer engaged in either fraudulent
conduct or other conduct that would put the DFSO in violation of this
regulation, in which case the DFSO may decline to honor the request for
withdrawal for a reasonable investigatory period until its investigation is
resolved if it provides notice of the nature of the investigation to the DFS
Consumer. For the purposes of 940 CMR 34.05(2)(b)5., a request for withdrawal
will be considered honored if it is processed by the DFSO but delayed by a
payment processor, credit card issuer or by the custodian of a financial
account.
(3)
Procedures for Closing Accounts at the Request of a DFS
Consumer. DFSOs shall implement and Prominently Publish procedures
that allow any DFS Consumer to permanently close an account at any time and for
any reason. The procedures will allow for cancellation by any means including,
without limitation, by a DFS Consumer on any DFS Platform used by that DFS
Consumer to make deposits into a DFS account.
(4)
Payment of Prizes on Closed
Accounts. If a Prize is awarded to a DFS Consumer with a closed
account, that Prize, to the extent it consists of funds, shall be distributed
by the DFSO within five business days, provided, however, if an account is
closed based on the DFSO's good faith belief, after investigation, that the DFS
Consumer has engaged in fraud or has attempted to engage in contest play that
would put the DFSO in violation of 940 CMR 34.00, such Prize may be withheld,
provided that the Prize is then awarded to another participant in the contest
who would have won the Prize had that DFS Consumer not participated.
(5)
Unclaimed Funds in DFS
Consumer Accounts.
(a) Subject
to the provisions of M.G.L. c. 200A, §§ 7 and 8A, and 960 CMR 4.00:
Procedures for the Administration of Abandoned Property, if a
DFSO Consumer account remains unclaimed for three years after the balances are
payable or deliverable to the DFS Consumer, the DFSO shall presume the account
to be abandoned.
(b) The DFSO shall
report and deliver all DFS Consumer accounts presumed abandoned to the
Treasurer of the Commonwealth as provided for by M.G.L. c. 200A, §§ 7
and 8A, and
960 CMR
4.03: Reporting Abandoned
Property.
(c) Subject to
M.G.L. c. 200A, 7A and
960 CMR
4.03: Reporting Abandoned
Property, at least 60 days prior to reporting any DFS Consumer
accounts to the Treasurer, the DFSO shall provide notice to the Consumer's last
known address and conduct due diligence to locate the DFS Consumer.
(6)
Publication of Terms, Conditions, and Rules. A DFSO
shall Prominently Publish all contractual terms and conditions and rules of
general applicability that affect a DFS Consumer's account. Presentation of
such terms, conditions, and rules at the time of on-boarding a new DFS Consumer
will not suffice.
