                       RECOMMENDED FOR FULL-TEXT PUBLICATION
                            Pursuant to Sixth Circuit Rule 206
                                   File Name: 09a0194p.06

               UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT
                                 _________________


                                                 X
                                                  -
 MARGARET WIKE,
                                                  -
                              Plaintiff-Appellant,
                                                  -
                                                  -
                                                       No. 08-5905
           v.
                                                  ,
                                                   >
 VERTRUE, INC., ADAPTIVE MARKETING, LLC, -
                                                  -
                       Defendants-Appellees. -
 and INFLUENT, INC.,
                                                  -
                                                 N
                     Appeal from the United States District Court
                 for the Middle District of Tennessee at Nashville.
                 No. 06-00204—Robert L. Echols, District Judge.
                          Argued and Submitted: April 23, 2009
                            Decided and Filed: June 2, 2009
       Before: SUHRHEINRICH, BATCHELDER and SUTTON, Circuit Judges.

                                   _________________

                                        COUNSEL
ARGUED: Daniel C. Girard, GIRARD GIBBS, San Francisco, California, for Appellant.
Robert Allen Horowitz, GREENBERG TRAURIG, New York, New York, for Appellees.
ON BRIEF: Daniel C. Girard, GIRARD GIBBS, San Francisco, California, Gerald E.
Martin, BARRETT, JOHNSTON & PARSLEY, Nashville, Tennessee, for Appellant.
Robert Allen Horowitz, Toby Sue Soli, GREENBERG TRAURIG, New York, New York,
and Robert S. Patterson, BRADLEY, ARANT, BOULT & CUMMINGS, Nashville,
Tennessee, for Appellees Vertrue, Inc. and Adaptive Marketing, LLC. Jay A. Yurkiw,
PORTER, WRIGHT, MORRIS & ARTHUR, Columbus, Ohio, for Appellee Influent, Inc.
                                   _________________

                                        OPINION
                                   _________________

        SUTTON, Circuit Judge. Margaret Wike filed this lawsuit against Vertrue and its
subsidiary, Adaptive Marketing (collectively, “Vertrue”), claiming that Vertrue violated
federal law by enrolling her in a discount club and charging a monthly fee to her debit card.



                                             1
No. 08-5905         Wike v. Vertrue, Inc., et al.                                    Page 2


The district court granted summary judgment to Vertrue on Wike’s claim under the
Electronic Funds Transfer Act (EFTA), 15 U.S.C. § 1693 et seq., and it denied her leave to
amend her complaint to add claims under the Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. § 1961 et seq. Concluding that EFTA’s one-year
statute of limitations does not bar Wike’s claim, we reverse.

                                              I.

        On February 13, 2005, Wike called America Online (AOL) to set up an internet-
service account for a friend. At the end of the call, the AOL representative told Wike that
she was eligible to claim a free $50 Wal-Mart gift card and, with Wike’s permission,
transferred Wike’s call to another operator who would provide more details. That operator
turned out to be a telemarketer for Influent, which sold memberships in discount clubs and
other programs for Vertrue.

        Once connected with Wike, the telemarketer confirmed Wike’s name, address and
telephone number and told her that, as a Galleria member, she would receive a “membership
kit” explaining how to claim her Wal-Mart gift card. ROA 1585. Yet Galleria membership,
the telemarketer explained, was not free: Wike would be billed $1 that day and, after a 30-
day trial period, would be billed $19.95 each month thereafter, unless and until Wike
cancelled her membership. Wike agreed, provided her Visa debit-card number and declined
an offer for a second discount club the telemarketer pitched.

        Wike claims she never received the promised membership kit (which Vertrue insists
it sent), though she acknowledges she might have disregarded it as junk mail. Nor did Wike
question the first $19.95 charge for “galleriausa” on her March 2005 bank-account statement,
mistakenly believing that it pertained to an unrelated purchase. ROA 1505.

        When a second monthly charge showed up on April 21, it got Wike’s attention. She
called Galleria’s support number several times over the ensuing months, asking that her
membership be canceled and the monthly charges refunded. None of this worked—she
received no refunds, and the monthly charges continued—until October 2005, when Wike
canceled her account and received a partial refund.
No. 08-5905         Wike v. Vertrue, Inc., et al.                                     Page 3


        Wike filed this class-action lawsuit against Vertrue in March 2006, alleging (in
addition to other claims not at issue in this appeal) that Vertrue’s marketing practices
violated EFTA, 15 U.S.C. § 1693 et seq. The district court granted summary judgment for
Vertrue, concluding that EFTA’s one-year limitations period barred Wike’s claim.

        Wike sought leave to add RICO claims to her complaint, alleging that Vertrue had
ensnared Wike and “hundreds of thousands” of other consumers in a deceptive marketing
scheme. ROA 1000. The district court denied Wike’s request, concluding that the proposed
amendment would be futile because Wike could not show she was injured “by reason of”
Vertrue’s alleged racketeering activity, 18 U.S.C. § 1964(c). Wike appeals both rulings.

                                                II.

        Wike first challenges the statute-of-limitations ruling. Enacted in 1978 as an
amendment to the Consumer Credit Protection Act, 15 U.S.C. § 1601 et seq., EFTA creates
a “framework [of] rights, liabilities, and responsibilities of participants in electronic fund
transfer systems,” id. § 1693(a). The statute covers a wide range of electronic money
transfers—from ATM withdrawals and debit-card payments to banking by phone—and
subjects them to a litany of procedural requirements designed to protect consumers from
transactions made in error or without their consent. See id. §§ 1693a(6), 1693b–1693f. In
addition to limiting a consumer’s liability for erroneous and unauthorized transfers, the
statute authorizes aggrieved consumers to file money-damages actions, which when
successful come with attorney’s fees. Id. § 1693m(a).

        Wike claims that Vertrue violated the statute’s restriction on “preauthorized
electronic fund transfer[s],” id. § 1693a(9), which may be permitted by consumers “only in
writing,” a copy of which must be given “to the consumer when made,” id. § 1693e(a);
accord 12 C.F.R. § 205.10(b); see also id. pt. 205 supp. I, ¶ 10(b)(2). Vertrue did not
comply with these requirements, Wike says, when the telemarketer enrolled her in the
Galleria program: It set up recurring charges to her Visa debit card without obtaining her
assent in writing (having obtained consent over the phone) and without giving her a copy of
the writing (there being no writing to give).
No. 08-5905         Wike v. Vertrue, Inc., et al.                                      Page 4


        The question in this appeal, however, is not whether Wike filed a valid EFTA claim;
it is whether she filed a timely one. Consumers must file claims “within one year from the
date of the occurrence of the violation,” 15 U.S.C. § 1693m(g), and the question here is
when the alleged violation occurred. The district court concluded that a violation of the
preauthorized-transfer rule occurs when the payee—here, Vertrue—takes all of the steps
necessary to arrange a future transfer, even if no transfer has yet taken place, while Wike
argues that a violation occurs when the first transfer takes place. Everyone agrees that the
transfers from Wike’s bank account were arranged on February 14, 2005, that the first
recurring transfer occurred on March 22, 2005, and that Wike filed her complaint on
March 14, 2006. Her complaint thus is timely if the date of the transfer, not the date Vertrue
arranged for the transfer, triggers the limitations clock.

        As we see it, the one-year limitations period began when the first recurring transfer
took place, not when Vertrue arranged it. Several clues point to the moment of transfer as
the pivotal event. First, the key provision speaks of preauthorized “transfers,” not efforts
to arrange them. Id. § 1693e(a). The same section also gives consumers who discover
preplanned transfers before they happen a mechanism for stopping them. Id. And beyond
the special safeguards that apply only to preauthorized transfers, EFTA imposes several
protections geared to ensuring that consumers learn about transfers from their bank accounts,
understand their liability for such transfers and have ample opportunities to dispute (and seek
reimbursement for) transactions they did not authorize. See id. §§ 1693b–1693h.

        Until the transfer takes place, indeed, nothing guarantees that it will happen or that
the consumer will suffer any harm. An entity like Vertrue could make a mistake while
initiating a transfer with a consumer’s bank, or the bank might fail to execute the
transfer—either because it dropped the ball or, if it recognizes the transfer is unauthorized,
because it sought to protect a customer. If the consumer learns of the transfer in time, he too
can break the chain by ordering his bank to stop payment. Id. § 1693e(a). We seriously
doubt that Vertrue (or any other payee in its situation) would concede an EFTA violation if
any of these contingencies interrupted the process and prevented the transfer from occurring.
Because there is no assurance at the time a payee attempts to initiate a transfer that anything
will come of it, there is good reason to think Congress created a cause of action that accrues
No. 08-5905          Wike v. Vertrue, Inc., et al.                                       Page 5


only when the reality of harm, not its mere possibility, takes place—which is when
“transfers” occur. Id.

        Second, as a “standard rule,” the statute of limitations begins to run “when the
plaintiff has a complete and present cause of action” and thus “can file suit and obtain relief.”
Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp. of Cal., Inc., 522
U.S. 192, 201 (1997) (internal quotation marks omitted). Customarily, that is true when the
defendant breaches a duty (here a duty imposed by statute) and the claimant is injured. Here,
Vertrue violated a duty when it initiated the transfers, but Wike was not injured until the first
transfer occurred. A consumer is injured only if, and only when, funds are withdrawn from
her account. Cf. Wachtel v. West, 476 F.2d 1062, 1065–66 (6th Cir. 1973) (holding that a
violation of the Truth in Lending Act’s disclosure requirements occurs, and the limitations
clock starts, when a lender enters a credit contract with a borrower without making required
disclosures, because the harm the borrower suffers—an inability to compare meaningfully
other lenders’ offers—materializes when the borrower becomes locked into a loan
agreement). No doubt, Congress may have authority in some settings to alter this “standard
rule” and to create a limitations period that begins before a plaintiff has a cause of action,
injury included. Bay Area Laundry, 522 U.S. at 201. But we hesitate to infer such an
unusual outcome absent some clear indication in the statute, see id., and EFTA contains no
such indication.

        Third, the practicalities of these transactions support this interpretation. How can
a consumer learn of a noncompliant transfer—and know that the time for protecting her
rights is running—until the transfer takes place? Say a telemarketer sets up a string of
recurring future transfers from a consumer to itself and does so without obtaining the
consumer’s consent. It is only when the first transfer occurs that the consumer will find out
what happened, and it thus is only then that the consumer will have any reason to vindicate
her EFTA rights. Some consumers, it is true, may know about an arranged transfer, even an
improper one, before it occurs. But the statute offers no handhold for creating two accrual
dates, one for consumers who know that an improper transfer has been arranged and another
for those who do not.
No. 08-5905          Wike v. Vertrue, Inc., et al.                                       Page 6


        In this setting, moreover, severing the statute-of-limitations trigger from the
consumer’s cause of action would lead to a peculiar result. If the limitations clock starts
when a payee arranges a future transfer, but the plaintiff cannot sue until a transfer occurs,
then the payee could violate EFTA with impunity. As long as the payee sets up transfers that
will occur at least a year in the future, the plaintiff’s time to file suit would run out before
he has a claim to bring.

        The district court, confronting a difficult question that no federal court of appeals has
yet faced, decided otherwise because the statute imposed obligations on Vertrue before the
first recurring transfer took place. At some point before withdrawing funds from Wike’s
account, Vertrue had to obtain her written consent and give her a record of that writing. 15
U.S.C. § 1693e(a). But nothing in § 1693e(a) pinpoints when Vertrue had to fulfill those
obligations. We know that if and when the payee secures the consumer’s consent in writing,
it must furnish a copy of that writing to the consumer. Id. § 1693e(a). And “preauthorized”
transfers by definition must be authorized “in advance.” Id. § 1693a(9). But nothing in the
statute says how far in advance the payee must obtain the consumer’s authorization or
whether it must do so at the time it arranges the transfer. Because EFTA leaves us in the
dark about when a payee’s inaction evolves into a violation (save upon a transfer), it makes
little sense to say that a consumer’s cause of action arises at the moment—what
moment?—the payee fails to comply with § 1693e(a)’s authorization requirement. Better
in our view to pin the accrual on an identifiable date when the plaintiff has been injured and
an EFTA duty necessarily has been violated—the date of the first transfer.

        The district court thought that a different provision cured this problem. Section
1693a(11) defines an “unauthorized electronic funds transfer” as (among other things) a
“transfer from a consumer’s account initiated by a person other than the consumer without
actual authority to initiate such transfer and from which the consumer receives no benefit.”
Id. § 1693a(11) (emphasis added). Zeroing in on the word “initiated,” the court concluded
that in the eyes of EFTA, the critical moment in Wike’s interaction with Vertrue’s agents
was when Vertrue took all of the necessary steps to make the transfers happen.

        Yet that reading runs aground in two places. One is that the statute’s definition of
“unauthorized” transfers has nothing to do with whether, or when, Vertrue violated the
No. 08-5905         Wike v. Vertrue, Inc., et al.                                        Page 7


requirements governing “preauthorized” transfers. The two provisions are related in the
sense that a preplanned, recurring transfer made without meeting § 1693e(a)’s prerequisites
may also become an “unauthorized” transfer once the claimant satisfies § 1693a(11)’s other
elements. But the provisions impose different requirements with different consequences.
A transfer is “unauthorized” only if the consumer received no benefit for it. Id. § 1693a(11).
And as Vertrue acknowledges, a payee that arranges a covered preauthorized transfer may
face liability under § 1693e(a) whether or not the transfer is “unauthorized.” Whether the
transfer is also “unauthorized” under § 1693a(11), in fact, matters only to whether the
consumer, his financial institution or both will bear ultimate responsibility for a particular
transfer the consumer later contests. See id. §§ 1693f–1693g. Whether the monthly
withdrawals from Wike’s account were “unauthorized” thus may determine whether she can
force her bank to reimburse her, but it has nothing to do with whether Vertrue violated
§ 1693e(a). Section 1693a(11) sheds no light on this case, for by its terms and design it
illuminates a different issue.

        The other problem is that the language of § 1693a(11) does not show that the
moment a payee prearranges a transfer is the moment that matters. Read in context, the key
phrase—“initiated by a person other than the consumer without actual authority to initiate
such transfer”—speaks not to the time a transfer is arranged, or even to the way it is
arranged, but to who makes it happen. Id. § 1693a(11). It tells us simply that an
“unauthorized” transfer means one made by a person lacking authority to do so.

        Vertrue fares no better in arguing that EFTA’s time bar is a statute of repose, not a
statute of limitations. Vertrue may be correct that, although we often employ these terms as
synonyms, see, e.g., United States v. $515,060.42 in U.S. Currency, 152 F.3d 491, 503 (6th
Cir. 1998), we sometimes distinguish the former—which runs from the date of the
defendant’s conduct, not the plaintiff’s injury—from the latter, see, e.g., Combs v. Int’l Ins.
Co., 354 F.3d 568, 590 n.11 (6th Cir. 2004); Roskam Baking Co. v. Lanham Mach. Co., 288
F.3d 895, 901–03 (6th Cir. 2002).

        But that conceptual distinction adds nothing to this case. It is not clear, as an initial
matter, whether EFTA’s time-bar provision even fits into the statute-of-repose category.
True, it speaks of the “date of the occurrence of the violation,” 15 U.S.C. § 1693m(g), not
No. 08-5905          Wike v. Vertrue, Inc., et al.                                      Page 8


the date of the plaintiff’s injury. Cf. Archer v. Nissan Motor Acceptance Corp., 550 F.3d
506, 508–09 (5th Cir. 2008) (construing similar language in § 1691e(f) as a statute of repose
not subject to a discovery rule). But so does the identical limitations language in the Truth
in Lending Act, 15 U.S.C. § 1640(e), which we have described before as a statute of
limitations, see, e.g., Weston v. AmeriBank, 265 F.3d 366, 368 (6th Cir. 2001); Jones v.
TransOhio Sav. Ass’n, 747 F.2d 1037, 1040–41 (6th Cir. 1984).

        Yet all of this makes no difference because, even if we grant that the EFTA provision
is a statute of repose—triggered by conduct, not consequences—that still requires us to
determine what conduct counts, what conduct in other words adds up to a violation. EFTA,
as we have shown, says nothing about when, before a transfer, a payee must obtain the
consumer’s written authorization. Characterizing § 1693m(g) as a statute of repose does not
change the fact that only a noncompliant transfer, not a payee’s freestanding failure to obtain
authorization for an as-yet-unconsummated transaction, starts the limitations clock.

        At oral argument, counsel for Vertrue suggested that comparing EFTA’s time-
limiting language with parallel provisions in the federal securities laws proves that Wike’s
claim accrued when Vertrue initiated the transfer. It does not. Fraud claims under the 1934
Securities Exchange Act are subject to a two-tiered limitations period: Plaintiffs must bring
suit either within “2 years after the discovery of the facts constituting the violation”—or
when the plaintiff should have discovered those facts through reasonable diligence—or else
within “5 years after such violation,” whichever comes first. 28 U.S.C. § 1658(b); see In re
Merck & Co., Inc. Sec., Derivative & ERISA Litig., 543 F.3d 150, 160–61 (3d Cir. 2008);
cf. 15 U.S.C. § 77m (imposing a similar two-layered limitations period for claims under the
1933 Securities Act). Because Congress created a separate, shorter limitations period that
starts to run once the plaintiff has reason to know that he has a claim, it makes sense to treat
the “violation” that triggers the five-year time bar as encompassing only the defendant’s
fraudulent conduct. But that tells us nothing about the meaning of EFTA’s time-limiting
language, which erects a single one-year bar and which contains no carve-out for cases in
which the plaintiff is on notice of a violation. Nothing in this statutory scheme offers a
comparable basis for initiating the limitations clock before any harm has materialized and
before the consumer has reason to know the payee has done anything wrong.
No. 08-5905         Wike v. Vertrue, Inc., et al.                                      Page 9


        Vertrue’s counsel also alluded to the availability of statutory damages as proof that
even a plaintiff who has suffered no actual harm may bring a lawsuit alleging a payee has
failed to fulfill EFTA’s requirements. See 15 U.S.C. § 1693m(a)(2)(A). But even assuming
(without deciding) that the statute permits a plaintiff who has suffered no injury to seek
statutory damages, that does not demonstrate that a consumer’s claim accrues when a transfer
is initiated. The availability of such relief (plus attorney’s fees) may encourage claimants
to file suit and may ensure that violations do not go undeterred. But it does not explain why
Congress would require such a plaintiff to sue without knowing that a violation has occurred
and why Congress would link the limitations period to a payee’s breach of a duty without
specifying when that duty must be performed.

        In resolving this issue, we need not decide a related question: Must a consumer
know that a noncompliant transfer has occurred before the limitations clock starts? Although
EFTA’s other provisions reduce the risk that a consumer will remain ignorant of such
transfers, see, e.g., id. §§ 1693d(c)(1), 1693f(f)(3), it does not say whether a consumer who
receives delayed notice of a noncompliant transfer can sue once the one-year window has
closed. Whether EFTA incorporates a discovery rule or permits equitable tolling are matters
for another day. For today’s purposes, it suffices to say that, because the bank made the first
recurring transfer from Wike’s account less than a year before this lawsuit, she timely filed
her EFTA claim.

                                             III.

        Wike also claims that the district court erred in denying her leave to amend her
complaint to add RICO claims against Vertrue. Since the district court issued its decision,
our court has decided one case, Brown v. Cassens Transp. Co., 546 F.3d 347 (6th Cir. 2008),
that bears on this question. And just before the district court’s decision, the Supreme Court
announced another decision, Bridge v. Phoenix Bond & Indem. Co., __ U.S. __, 128 S. Ct.
2131 (2008), that bears on this question. Because we have decided that Wike has a non-
time-barred EFTA claim, because we must return this case to the district court in any event
and because most leave-to-amend decisions are largely discretionary, it makes sense to allow
the district court to decide at this point whether to allow Wike to add a RICO claim.
No. 08-5905      Wike v. Vertrue, Inc., et al.                            Page 10


                                          IV.

      For these reasons, we reverse and remand for further proceedings.
