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FTC sues NetSpend over access to funds

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Many people who don’t have bank accounts rely on prepaid debit cards which you buy and add money to so you can make purchases and pay bills. But the FTC says thousands of NetSpend prepaid debit card holders had trouble getting access to cash they loaded onto the cards, or to direct deposits from their paychecks or government benefits. Cardholders who couldn’t access their money often had no other way to pay for necessities, which caused some severe financial hardship, including late bill payments, repossessed cars, and even eviction.

NetSpend markets their cards – in English and Spanish – to people who don’t have traditional checking or savings accounts. The FTC’s lawsuit claims NetSpend’s ads told consumers they would have immediate access to funds loaded on the cards and were guaranteed approval for the cards. Also, NetSpend promised that cardholders disputing transactions would get temporary credits of those transaction amounts, pending investigation.

Despite NetSpend’s promises, the FTC says many consumers also were not able to access their money immediately, and in some cases lost access for days or weeks or even completely. And the FTC says that in reality, many NetSpend cardholders were not automatically approved to use the cards but, instead, all consumers had to go through a sign-up process which sometimes resulted in approval being denied and any funds placed on the cards being lost.  The FTC also says that in many cases, NetSpend didn’t issue temporary credits during transaction disputes in a timely way, if at all.

If you’re considering using a prepaid card, be sure you understand how it works.  Read the terms before putting money on the card, and do an online search to check out the company’s track record. If a prepaid card company deceives you about its terms and services, report it to the FTC.

 

 

 

Tagged with: account, bank account, debit
Blog Topics: 
Money & Credit

Comments

I'm used Prepaid Card from Netspan 9041

I'm young retired. Just when I thought I knew everything, you have one more surprise tip for me.

When I was 18 (in the 1970s), I easily opened my first checking account, and paid for everything that cost more than $10 with a check, which all merchants took thru about 1990.

Your pre-loaded debit card video makes it sound like this is usually a rip-off product. I don't understand why today's young generation can't just open up a checking account with a normal debit card. Get to keep $157 out of $200 is highway robbery.

The credit card people are wooing unemployed people to their products, so why can't 20 somethings get a normal debit card? Any other thoughts out there?

Getting a checking account in the 70s was easy, just as you said. Now it takes an act of Congress, drops of blood and your firstborn child.
People who use prepaid cards are usually low-income and/or work jobs that pay them cash. It is difficult to maintain a record that way. The prepaid cards are a way for them to have a place to put their money with access to it. Paying bills isn't as simple as it once was either. Not having the qualifications to open a bank account (and yes, now you have to qualify for a bank account) means the person still has find a way to pay bills when there are no local offices, such as utility companies. Those companies have moved their billing and payment services out of the communities (some have moved them to other countries) which makes stopping in to pay the bill with a check or mailing a check unlikely.
Bottom line, don't look to prepaid cards use as due to being uneducated or uninformed or lazy. Sometimes the system makes it the only option. I have worked with students for 20 years and I can attest to how hard it is now.

Ive been told several times to go to atms and got nothing.I do have a bank account they make you use their sources.

I had a networks card a few years ago and I had been using it for a few years to pay my bills at the beginning of the month, all one month I went to load the card and it would not load my card so I purchased another card and it wouldn't load it either called them and they told me something about someone had tried to access my account, well they never informed me at anytime about that but they refused to load my card! Now why refuse to load my card if someone I did not know about tried to take money out of my account and you never told me about this until I get ready to pay my bills for the month? I no longer use there cards..

Is there a resolution of the dispute available? I and a friend were both deprived of money due to NetSpend.

The FTC just filed the case against NetSpend last week. You and your friend can report problems you had with NetSpend to the FTC. Go to FTC.gov/complaint and give details about what happened. The information you give will go into a secure database that law enforcement uses for investigations and cases.

have problem i have no car file on line they did not pick up the paper work off the enternet but i real need to back and some more ed so with being scam and deal with ref starting over is not easy the bank is us bank is springfield mo im pay for school my name got mix when thought id thief paper with irs

on a victim of netspend they have put me in so many financial situations. Just right now I'm going though many losses 324.09 for tickets and show cancel,hotei deposits ,now say I owe for a state check which I get pay ed every two weeks working 15 year the list goes on. Please help to compensate for my inconvenience.

I just received this netspend card in the mail today, I am not sure why I was sent it. I knew it was not a good idea to use it.

I deposited money into my NetSpend card and when I went to withdraw money the money never came out of the ATM but the receipt showed otherwise, I called NetSpend they told me that they couldn't do anything about it , bottom line it 6 months to get my money

Netspend won't give me my tax refund. The numbers are all correct and have been checked. Now I have to file a class action lawsuit. The people over seas and the CEO Mr. Daniel R Henry doesn't seem to care that he just got a single mother who goes to college and has a 8 month old daughter EVICTED from her apartment of good standing for five years. They don't seem to care that you don't receive your direct deposit online.

netspend withheld 19000.00 from me at one point.

They would not give me my tax return it took over 3 week to get it..

Started selling on eBay last year.
first $600 sold in 3 weeks went smooth, net spend had my funds immediatly .
After that net spend started putting a hold on my money for a few days.
It finally got to the point where all my money was tied up in transactions.
I stopped selling because of the delay in funds....I pray that I have some type of refund

I loaded a netspend western union card 2 YEARS AGO went 2 used it bkuz I 4 got one of my password they lock my card and blocked me from using it I just got a letter in the mail saying I can get my money back as long as I do the paper work n email my complaint this was 2 months ago ive yet 2 here anything from this people ITS MY MONEY AND I NEEDED IT THEN 2 PAY BILLS 2 YEARS IM JUST NOW GET CONTACTED FROM THIS PEOPLE WITH A LETTER IN THE. MAIL 2 MONTHS AGO AND IVE YET 2 GET MY REFUND WHAT DO I DO???

NetSpend Corporation is providing refunds to people.  NetSpend is sending notices by email and mail to people who are eligible for a refund. Read more about how to get a refund.

You have to apply before October 7, 2017.

I'm a netspend card holder .

NetSpend Corporation is providing refunds to people. NetSpend is sending notices by email and mail to people who are eligible for a refund. Read more about how to get a refund.

You have to apply before October 7, 2017.

over charged for same time transactions multiply, never refunded, one time 12$ for one transaction that was suppose too cost 1$

NetSpend Corporation is providing refunds to people. NetSpend is sending notices by email and mail to people who are eligible for a refund. Read more about how to get a refund.

You have to apply before October 7, 2017.

I recently received an unsolicited Netspendcard, in addition to several emails to which I have unsubscribed. I am wondering how they selected me for a card for which I did not apply or request? They provide an email address and phone number for "declining" their offer; however, I assume I can just ignore them and destroy the card and their mailings?

I'm not sure what to do. My Direct Deposit has not show up on my Netspend account which should have gone through yesterday. I have written them 3 times with no response. I don't know what to do. My rent it do and I am very upset.

I have a bank account and received mail from netspend ,I have never requested any thing from them at all

Wish I knew this beforehand. Now they haven't sent my SS. I have to wait until Dec 3rd to get my money. Does anyone know who I can call?

Mail came today with BIG surprise I did not apply for! Netspend actually states that I applied for the card, NO
I can't OPT OUT, I can't use the website to Opt Out, phone number-can't opt out. Mastercard-ARE YOU REALLY SUPPORTING THIS? What do I do to get rid off this. Even if I cut up the card and shred the info it is still out there somewhere in the ether. MAD

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