The Consumer Financial Protection Bureau (CFPB) is asking people to share their problems with prepaid cards and other financial products.
Gift cards, benefit cards, and general-purpose reloadable cards all fall under the prepaid cards umbrella that the CFPB is seeking to investigate. In addition, they are taking complaints about debt settlement services, credit repair services, and pawn and title loans.
When the CFPB opened in July 2011, they began taking consumer complaints about credit cards right away. They now also accept comments on mortgages, banking services, student loans, credit reporting, payday loans and more. But this is the first time they have taken complaints about the increasingly popular prepaid card industry.
“By accepting consumer complaints about prepaid products and certain other services, we will be giving people a greater voice in these markets and a place to turn to when they encounter problems,” said agency director Richard Cordray.
Common prepaid card complaints
As many people replace their traditional checking accounts with low-fee prepaid accounts, prepaid cards are becoming more and more common. Companies like American Express offer prepaid accounts with very low fees, like the Bluebird card which they sell in partnership with Walmart.
Unlike credit cards, people load money onto prepaid cards before they use them. This means people cannot go into debt using a prepaid card. They also do not affect a user’s credit history, and anyone can get one, regardless of their credit score. Some companies use prepaid cards to pay employee salaries. The government also uses them to distribute Social Security, EBT and other benefits.
Common problems the CFPB expects to address include:
- Difficulty managing accounts – opening, closing, or getting information
- Overdrafts and fees
- Fraud and unauthorized transactions
- Advertising and marketing schemes
- Money loading issues, savings and rewards features
Fraud, fees, advertising and customer service are just some the complaints the CFPB expects to field regarding nonbank products like credit repair, debt settlement and title loans.
After filing a complaint, consumers are given a tracking number and can check complaint status on the CFPB website. The CFPB asks companies to respond to complaints within 15 days, laying out concrete steps they will take to resolve the issue. They expect to close most complaints within 60 days.
To file a complaint, go to consumerfinance.gov/complaint, call 1-855-411-2372, or by mail: CFPB at P.O. Box 4503, Iowa City, Iowa, 52244.