Prepaid Debit Card Reviews, Complaints, Etc

Tag: featured

  • New FBI Prepaid Card Scam – Alert By Better Business Bureau

    New FBI Prepaid Card Scam – Alert By Better Business Bureau

    Criminals have certainly been hard at work lately. As anybody who has picked up a newspaper or logged onto the Internet recently knows, retail giant Target and tens of millions of its customers were the victims of a holiday season heist of payment and other personal information. And on January 17th, the Better Business Bureau issued an alert about a new FBI prepaid card scam.

    According to the announcement from the Council of Better Business Bureaus (BBB), this most recent thievery attempt involves a phone call from someone claiming to be an agent from the Federal Bureau of Investigations (FBI). The caller impersonating an FBI agent follows a familiar script, according to the BBB. “You answer the phone. The caller ID says “Federal Investigations,” and the person on the other line claims to be an FBI agent. He or she says the FBI is monitoring your online activity, and they know you have an overdue payday loan.”

    From there, the BBB says a caller will demand that whoever answered the phone pay the alleged debt off instantly via a prepaid debit card or wire transfer. If someone fails to do so, the supposed FBI agent will threaten legal action and jail, an especially unnerving threat because the caller often has personal information such as a social security number, address and place of work.

    No matter how persuasive someone may sound on the phone, the BBB says to never agree to pay anything. “Despite the threats, these “FBI agents” don’t have power over you,” reads the BBB’s alert. “Don’t give in and pay money you don’t owe; it’s likely scammers will just be back for more.”

    To help consumers avoid becoming victim to these scams, the BBB suggests taking the following steps. First, hang up and don’t call the number back. “It is temping to get the last word, but you may end up giving scammers information they can use later.” After hanging up the phone, the BBB suggests contacting the local police department to report the impersonation of a law enforcement officer.

    Additionally, the BBB points out that caller ID spoofing is easy so don’t be fooled by what appears to be a legitimate institution. If you do stay on the line with the caller, ask him or her for an official validation notice of the debt. “Debt collectors are required by law to provide the information in writing. The notice must include the amount of the debt, the name of the creditor and a statement of your rights under the Fair Debt Collection Practices Act,” reads the statement. “If the self-proclaimed collector won’t provide the information, hang up.”

     

     

     

     

  • Senate Bill Aims To Ensure Prepaid Card Fee Disclosure

    Senate Bill Aims To Ensure Prepaid Card Fee Disclosure

    U.S. Senator Mark Warner chose the end of the holiday shopping season to introduce a bill that would mandate prepaid card fee disclosure. Warner, a Democrat from Virginia, unveiled the Prepaid Card Disclosure Act of 2014 on January 9, and cited the recently completed holiday gift buying season and the industry’s rapid growth as the reasons motivating his bill.

    “At nearly $700 billion in sales each year, prepaid cards are one of the fastest growing parts of the financial industry,” he says. “However, these cards aren’t subject to the same kinds of consumer protections as other types of credit cards and gift cards. It’s important that young people and people without credit history or access to traditional banking tools have access to prepaid cards, but we can’t let the technology outpace smart consumer protections.”

    Specifically, Warner’s bill would task the Consumer Financial Protection Bureau (CFPB) with formulating and issuing rules that would require banks and other providers of prepaid cards to disclose their fees in a standardized manner. Among other things, the Prepaid Card Disclosure Act would require card issuers to reveal all of the fees associated with their products in an easily understood and conspicuous table that would be available to consumers before any purchase. In addition, the bill would insist banks allow consumers to use their smartphones to obtain real-time fee updates via a QR code or barcode. The proposed legislation would also require card issuers include both a toll-free telephone number and a website on each physical card where consumers could get detailed information about fees.

    In announcing the legislation Warner cited a range of fees that, while commonly associated with prepaid cards, may not be well known among the general public. Among the fees Warner, a member of the Senate Banking Committee, mentioned were fees to activate an account, monthly maintenance fees, and for checking account balances. Consumer advocates warmly received the bill. “Pew commends Senator Warner for taking action to require clear disclosures for prepaid cards. Pew’s research shows that inconsistent disclosures make it very difficult for consumers to understand the terms and fees associated with each card,” says Susan Weinstock, director of safe checking research at The Pew Charitable Trusts. “The growing number of consumers turning to prepaid cards as a way to manage their money underscores the need for reform.”

     

     

  • Pot Purchases with Plastic? The Credit and Debit Cards Question

    Pot Purchases with Plastic? The Credit and Debit Cards Question

    One of the first major news stories of 2014 is all about marijuana. Starting January 1, pot has been available for commercial purchase by non-medical customers in Colorado. In other words, Colorado residents are now able to purchase marijuana for recreational use by walking into a store, making a selection and paying for it at the counter – just as if they were purchasing a gallon of milk or an iPad.

    But one question that has accompanied the rollout of legal pot sales in the Rocky Mountain State is whether customers would only be able to make purchases with cash. It’s an issue because marijuana sales, while legal in both Colorado and Washington State, are still prohibited by the federal government. So, out of this arises this: pot purchases with plastic? It opens up the credit and debit cards question on pot purchases.

    In the past both Visa and MasterCard said that they would not allow illegal transactions to flow through their payment systems. But a recent article in the Denver Post indicates that credit and debit cards are being used to buy marijuana in Colorado. In part, this is due to the fact that Visa and MasterCard are leaving the decision about whether credit and debit cards bearing their logos can be used up to individual merchant banks.

    “In this instance, the federal government considers the sale of marijuana legal but has announced that it will not challenge state laws that legalize and regulate marijuana sales,” Visa said, in a statement to Denver Post reporter, David Migoya. “Given the federal government’s position and recognizing this is an evolving legal matter with different standards applicable in different states, our local merchant acquirers (banks) are best suited to make any determination about potential illegality.”

    While experts quoted in the Denver Post story maintain that Colorado pot retailers still face a risk in choosing to offer credit and debit card payment options, the motivation to do so is clear. In his story, Migoya quotes a customer who decided to make a bigger purchase when he found out that the store accepted plastic. “I showed up with some cash on hand because I had read prior that these places would be cash only,” said the customer, who would give only his first name, Kevin. “Once I found out that they were taking cards, I decided to buy more than the $25 in cash I had with me.”

  • U.S. Credit Card Security Outdated

    U.S. Credit Card Security Outdated

    Target has begun 2014 with a very bad hangover. As has been widely reported, as many as 40 million of the large retailer’s customers had financial and personal information stolen during the height of the holiday shopping season. The repercussions for Target have already been severe and seem only to get worse by the day. Besides seeing its all-important holiday shopping traffic decline, several states’ attorneys general are investigating Target and a number of class-action lawsuits have been filed against the company.

    A recent story in The Los Angeles Times points out that backward technology long ago abandoned by much of the rest of the world may be more to blame for the data breach than anything Target did or didn’t do. The story by reporter Chris O’Brien says that while it’s still the norm for U.S. credit card holders to have plastic with a magnetic strip that holds their account information, most other countries have opted for so-called smart cards.

    These smart cards earn that name, O’Brien writes, because they utilize embedded microchips to hold customer information rather than the magnetic strips that are found on 99 percent of all of the credit cards issued in the US. “The additional encryption on so-called smart cards has made the kind of brazen data thefts suffered by Target almost impossible to pull off in most other countries,” writes O’Brien.

    Because around 80 countries have already embraced smart card technology, the more vulnerable U.S. has become the favorite target of identity thieves. Given that smart cards provide such superior security, the question is why the U.S. hasn’t embraced their use. According to O’Brien’s story, there has been no political pressure to force businesses and financial institutions to make the switch. Importantly, an upgrade to smart cards would be expensive.

    Nevertheless, it does appear that the U.S. will soon become home to a lot more smart cards. According to O’Brien’s article, many credit card issuers have launched efforts to make the switch by October of 2015. To do that, credit card companies will change the rules about who is responsible whenever there are fraudulent purchases as a result of security breaches. “Under the new rules, the entity in the payment chain – merchant, credit card, banks – deemed to have the weakest security will be liable,” writes O’Brien. “Credit card companies can’t make anyone adopt the technology, but they’re giving them a hard nudge.”

  • UN Turns To Prepaid Cards

    UN Turns To Prepaid Cards

    To better aid Syrian refugees, the United Nations is utilizing prepaid debit cards.

    by Shane Tripcony

    By every measure the ongoing civil war raging in Syria has been a humanitarian disaster. The United Nations estimates that over 100,000 people have died in the years long clash between supporters of President Bashar al-Assad and the various factions seeking his ouster.

    Not surprisingly, millions of Syrians have fled the violence that has destroyed cities and towns across the country. An estimated 800,000 Syrians have made the trek to nearby Lebanon, where the United Nations World Food Programme is leading efforts to provide food and water.

    As part of that initiative, the UN Food Programme has reportedly decided to utilize MasterCard prepaid debit cards. According to a story on the website, Mashable, the UN is set to begin distributing the cards; each loaded with $27, with the goal of eventually getting one to each and every refugee. Each month the cards will be reloaded with an additional $27, an amount the UN believes is sufficient to meet the monthly nutritional needs of an individual.

    The distribution of prepaid debit cards, which can be used to buy food from the 300 Lebanese stores that have agreed to accept them, will replace the UN’s use of both pre-packaged rations and paper vouchers.

    UN officials say that the use of prepaid debit cards will provide many benefits. Refugees will no longer have to line up to receive coupons every 30 days and the local economy should get a boost from Syrian purchases. The cards also offer the promise of more self-sufficiency. “They’re just more independent that way,” Bettina Luescher, a spokesperson for the UN World Food Programme told Mashable writer, Colin Daileda. “They can get what they like for their families.”

    The cards are also less susceptible to fraud, a MasterCard executive told Mashable, because they’re easy to track and require a UN issued ID to use. The UN has already piloted the use of prepaid debit cards in Lebanon, albeit with just 10,000 people in one town. But if the card works well in all of Syria, the UN plans to begin distributing them to the 300,000 Syrian refugees currently living in Jordan.

  • Changes To American Express Serve Cards

    Changes To American Express Serve Cards

    Starting in November, American Express Serve prepaid customers will be able to add cash to their accounts at CVS and 7-Eleven with no fees.

    by Shane Tripcony

    The competition to serve the millions of Americans lacking traditional bank accounts just got a little stiffer. On October 8, American Express announced significant new changes to how its Serve prepaid card works. Starting in November, Serve customers will be able to load cash to their accounts, for free, while shopping at over 14,000 CVS and 7-Eleven stores nationwide. Additionally, American Express Serve customers will also be able to add funds via direct deposit of a paycheck without incurring a fee. By the end of 2013, customers with a smartphone camera will be able to take a picture of a paper check and add that money directly into their account by using Serve’s mobile app.

    In making these changes to how the Serve card functions, American Express declared that it was directly targeting the almost 70 million so-called “under banked” Americans. “Unfortunately, the traditional banking system is not easily accessible to large segments of the population, making managing money cumbersome and expensive for many,” says Dan Schulman, Group President of Enterprise Growth at American Express. “Today, we’ve added a number of new features to make the management and movement of money more affordable and convenient for everyone.”

    In the past, individuals who did not have bank accounts have had to rely on check cashing or payday loan services. Many of which charge exorbitant fees or prepaid debit cards layered with charges for everything from adding money to an account to checking a balance. While there are still plenty of prepaid cards that charge high fees, more and more big financial players like Chase, U.S. Bank and PNC are now offering low-fee options.

    The changes American Express has made to its Serve card are meant to address what it sees as the substantial charges that come with simply adding money to an account. Citing research from Javelin Strategy and Research, American Express says that 41 percent of under banked customers report paying between $3.00 and $3.99 to reload their prepaid cards. Depending on how often someone reloads their card, American Express estimates that utilizing Serve, which charges a $1 monthly fee, could save between $72 and $240 annually. The savings could be even greater if a Serve customer opts to use direct deposit or adds at least $500 to an account over the course of a month.

    In addition to a variety of fee-free ways to add money to Serve card accounts, American Express also allows customers to withdraw money from MoneyPass ATMs for free as well as pay bills for free using Serve.com and the Serve mobile app.

Prepaid Debit Card Reviews, Complaints, Etc