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CFPB Monthly Complaint Snapshot Spotlights Prepaid Product Complaints
Wednesday, October 26, 2016 6:40 AM

On Tuesday, the Consumer Financial Protection Bureau released a monthly complaint snapshot highlighting consumer complaints about prepaid products. The report shows that consumers continue to experience issues trying to manage their accounts and access funds.

“For many unbanked and underbanked consumers, prepaid products are a vital source of financial security,” said CFPB Director Richard Cordray. “We want to make sure consumers using prepaid products can easily access their funds and companies are working to resolve consumers’ issues.”

View the Monthly Complaint Report.

Category Spotlight: Prepaid Products

Prepaid products present an important financial alternative to consumers who are unable to utilize a traditional checking account. By loading funds onto prepaid cards, consumers can make payments, withdraw cash, receive direct deposits from employers, and send funds to other consumers.

Last month the CFPB finalized rules requiring financial institutions offering prepaid products to limit consumers’ losses when funds are stolen or cards are lost as well as new Know Before You Owe disclosures for prepaid accounts. As of Oct. 1, 2016, the Bureau had handled approximately 6,000 prepaid product complaints. Some of the findings in the report include:

  • Consumers complain of unauthorized transactions: Consumers frequently complained about transactions they did not recognize appearing on their accounts. Some of these consumers complained that when they submitted a dispute to the company about a transaction, their card would be cancelled without notice.
  • Complaints about registering prepaid cards: Consumer complained about difficulty registering and using their cards after purchasing them. Consumers would often be informed that their card was inaccurately registered and be asked to submit difficult to obtain documentation such as the original packaging the card came in and sales receipts.
  • Consumers complain of trouble resolving problems: Consumers complained that when they submitted claims about stolen funds, they experienced prolonged investigations, leaving them unable to access the funds on their frozen account. Additionally, consumers complained about lengthy delays in receiving credit on their cards after notifying the company of a fraudulent or unauthorized transaction.
  • Most-complained-about companies: American Express, PayPal Holdings, Inc., and NetSpend Corporation were the three companies about which the CFPB has received the most prepaid product complaints.

Get more information on prepaid accounts.