Prepaid Debit Card Reviews, Complaints, Etc

Tag: prepaid card

  • American Express Joins Forces With Video Game Maker

    American Express Joins Forces With Video Game Maker

    Talk about a big, captive audience. Every month the online video game called League of Legends attracts 32 million players from all around the world, who together spend a staggering one billion hours virtually battling and trying to outsmart one another.

    In August of 2013, American Express announced a partnership with the developer of League of Legends, Riot Games, to release a line of prepaid debit cards geared specifically towards the game’s many devoted fans. According to a report in The New York Times, the collaboration is a way for American Express to capture the much- coveted attention of the mostly male, 18 to 24-year-old players while providing Riot Games with the kind of financial resources it needs to expand. “There is a great opportunity for brands here, particularly brands that make sense for our players,” Times reporter Tanzina Vega quoted Dustin Beck, vice president of electronic sports at Riot Games as saying.

    While the American Express Serve Prepaid Account works in much the same way as any prepaid debit card – allowing cardholders to fund their accounts in a variety of ways, including direct deposit, and then spend the money wherever American Express is accepted – there are naturally a host of elements designed to appeal to League of Legend gamers. Indeed, according to the American Express press release announcing the partnership, players can personalize their cards with images and logos from the game. Perhaps more importantly, using the prepaid debit card earns players so-called “Riot Points,” which is the virtual currency used in League of Legends to purchase characters and other goodies helpful in the game.

    For instance, anyone who completes registration for the card – which has no activation fee and no minimum balance – earns 1,000 Riot Points. Loading $20 onto the card for the first time earns gamers 1,000 and initiating direct deposit to fund the card garners 10,000 Riot Points. American Express undoubtedly hopes that the passion so many people have for League of Legends will transfer to the prepaid debit card. “Riot Games is passionate about serving their players and giving them avenues for enhancing their gaming experience,” said Stefan Happ, senior vice president, US Payment Options for American Express. “Together we’ve been able to create a co-branded product with a unique rewards program that will help League of Legends players earn Riot Points whenever they use their card to make qualifying purchases.”

  • Retailers Celebrate Swipe Fee Ruling – Federal Reserve Caps Swipe Fees

    Retailers Celebrate Swipe Fee Ruling – Federal Reserve Caps Swipe Fees

    By Shane Tripcony

    It has been an issue of contention for a long time. The so-called swipe, or interchange, fees that retailers are charged every time a customer makes a purchase using a debit card have long been a boon for banks and the bane of retailers who have to pay them.

    Most recently, thanks to the Dodd-Frank law that passed in 2010, the Federal Reserve put a cap on those fees at 21 cents per transaction. Although banks screamed that the cap would cost them billions in lost revenue – and force them to eliminate perks and awards programs – retailers were never overly thrilled with the ruling, either, arguing that the fee was still artificially high.

    According to a report in Bloomberg, U.S. District Judge Richard Leon in Washington ruled on July 31 that the Federal Reserve considered information it shouldn’t have in arriving at its cap of 21 cents. Additionally, Bloomberg reporter Tom Schoenberg writes that Leon’s ruling determined that the Fed did not sufficiently foster competition among the card networks that levy the fees. “The board’s final rule not only fails to carry out Congress’s intention; it effectively countermands it!” wrote Leon in his ruling.

    Although the current swipe fee cap will remain in effect, the ruling means that Fed regulators will have to go back to the drawing board and come up with either a new or an interim ruling. Not surprisingly, the reaction to the ruling was split, with retailers cheering the decision and banks claiming it will do harm to banks and their customers. “The price controls enacted as a result of the Durbin Amendment served one purpose – further lining the pockets of our nation’s big-box retailers at their own customers’ expense,” Bloomberg quoted Frank Keating, the president of the American Bankers Association as saying. “It was – and still is – all about trying to help retailers increase profit margins while providing no real benefit to consumers.” By contrast, the National Retail Federation released a statement saying that the “decision is the first step in setting these initial wrongs right and will ensure that swipe fee reform is done correctly.” Although nothing concrete has been announced yet, it’s unlikely that the ruling will not be appealed.

  • The Occupy Movement Takes On Prepaid Cards

    The Occupy Movement Takes On Prepaid Cards

    The name says it all. When Occupy Wall Street became a household name a couple of years ago, the protesters were able to focus a light on the financial services industry and – at least in its view – the many harms it inflicts on the vast majority of citizens and the nation as a whole.

    While the Occupy movement was successful in raising awareness about the activities of big banks and other financial players, there has been plenty of criticism that it was lacking in concrete accomplishments. In at least one very specific way, that looks to be about to change. In July, it was announced that the Occupy Money Cooperative was being launched and that its first product would be a prepaid debit card.

    Recently, BestPrepaidDebitCards.com spoke via email with Carne Ross, a founding board member of The Occupy Cooperative, about the Occupy Card , why it chose to issue a prepaid debit card and how the group aims to change the financial services industry.

    BestPrepaidDebitCards.com : Why is Occupy’s first financial product a prepaid debit card? Is it because they have traditionally been such a bad deal for consumers? Or does it also have to do with the fact that this is a product that has a lot of potential?

    Ross: We chose a prepaid card as our first product because it’s one area where the unbanked and underbanked are exploited by current providers charging excessive and often hidden fees. We have also realized that this is a dynamic market and we believe that we can offer a competitive product in the long run, because our costs will be low. Moreover, the more users for the card, the lower the fees, as we will be able to negotiate better rates as we scale.

    BestPrepaidDebitCards.com: A breakdown of fees is important, even if it’s estimates. Just how drastically will the Occupy prepaid card differ from other prepaid cards? Besides fees, what other ways will the Occupy prepaid card be different from its rivals?

    Ross: I appreciate the questions but unfortunately I simply cannot even foreshadow the card’s fees and features at this point. We think it will be among the best deals on the market. Our aim is to minimize costs and pass these onto the consumer. We also think that the card will offer some good innovative features. Above all, if you use the card you become a member of the co-op that will offer the card, i.e. you become a co-owner of the company. You will have a stake and a say in how the co-op is run.

    BestPrepaidDebitCards.com: Do you have an estimated launch date for the Occupy Card?

    Ross: We do not. We hope soon. We are about to launch a campaign to crowd-source funding for initial operating expenses for the co-op. If successful – which we expect – we shall launch the card immediately. It’s ready to go. Until we launch the card, I’m not able to say much more, I’m afraid. We want to be super-transparent as a company, but some details we are required (legally) to withhold until the launch.

    BestPrepaidDebitCards.com: What sort of impact do you expect the card will have on banking in general?

    Ross: As we build up the number of users of the card, we shall soon be able to introduce further services that will shake up the current behemoths in the banking sector. These products will serve the same constituency as the card, wherever possible they will bolster the credit unions, provide low-cost choices, bypass the entrenched systems that rip everyone off, and brick-by- brick build alternatives for ordinary folk’s needs. I also should have been clearer in saying that because our costs are very low, we should be able to pass on any savings or benefits to our customer-members.

  • A Card Level View Of The Economy Indicates Consumer Confidence On Upswing

    A Card Level View Of The Economy Indicates Consumer Confidence On Upswing

    It’s safe to say that we all have economic indicators that we like to examine in order to gauge the health of the overall economy.

    By Shane Tripcony

    For professional economists and academics, of course, there are reams of data about arcane sounding things like durable goods orders that help them determine whether the economy in the U.S. is healthy or ailing. For regular folks, though, the way to divine whether the American economic picture is brightening or darkening is through more subtle observations, like whether or not a favorite restaurant is bustling or the presence (or absence) of “for lease” signs along main street.

    But given the prevalence and use of credit cards in the U.S. economy, another solid indicator is the spending habits Americans have with their plastic. And that’s just what the quarterly Chase Freedom Lifestyle Index reports by tracking and sharing exactly how users of the Chase Freedom credit card truly spend their money. Chase, which is the consumer and commercial banking unit of JP Morgan Chase & Company, insists that this is a better way to measure overall consumer trends – and hence, the all-important mood of the consumers who power the U.S. economy – than more speculative opinion polls and surveys.

    The most recent version of the Chase Freedom Lifestyle Index, which measures spending from the second quarter of 2013, indicates that consumer confidence is on the upswing, albeit ever so slightly. Indeed, the index reports that year-over-year spending ticked up one percent from the second quarter of 2012 compared to the same time period this year. But once you dig down a bit more into the data, individual sectors of the economy seem to be doing both much better and worse than that general measure.

    For instance, spending on things like sporting goods and museums both rose by seven percent year-over-year, along with lessons and classes and books, which rose by six percent and eight percent, respectively. Most striking was a 14 percent rise in spending in the costume retail category, which seems to point to a busy prom and wedding season. Still, not all categories saw increased spending. Spending on gas slumped by seven percent from 2012 to 2013, as did the amount of money shelled out for consumer electronics.

    Even though no individual reading of the direction and strengths of the economy is complete by itself, this latest data dump by Chase adds to a growing body of evidence that the economy is moving (however slowly) in the right direction.

  • Green Dot Posts Solid Results Despite Increased Competition

    Green Dot Posts Solid Results Despite Increased Competition

    By Shane Tripcony

    One of the most prominent messages on the homepage of Green Dot Corporation, a longtime issuer of prepaid debit cards, is a simple one. “Big Banks, No Thanks,” blares a nearly screen-sized headline, which alternates between a promotional message about something consumers likely care a good bit more about: a chance to win a year of free gas.

    In many ways, this short, punchy salvo – which is buttressed with the message, “The Green Dot Card is the smart and easy way to manage your money,” along with a 5- question quiz that purports to answer whether a Green Dot Card is right for you – says an enormous amount about the state of the prepaid debit card industry today. It’s hardly a new flash to readers of this site, but large financial institutions of all sorts, including American Express and JP Morgan Chase, have begun offering prepaid debit cards in hopes of grabbing a slice of this quickly expanding and lucrative market.

    For prepaid debit card consumers, the attention of big financial players has been an undeniably good thing: fierce competition among rivals, some of whom are willing to forgo chunks of revenue in the short-term in order to gain market share, have put much needed downward pressure on fees and increased overall transparency. But longstanding industry players like Green Dot could be forgiven for not being thrilled with the prospect of tough competition that threatens to eat away at their profits.

    Still, Green Dot’s web page swipe at its competitors isn’t exactly an effort to mask the company’s weakness. In fact, on July 30 of 2013 the company announced results for the second quarter and Green Dot seems to be holding its own just fine, thank you. Indeed, the California-based company reported net income of $11.3 million for the quarter, which was 4 percent higher than the same period in 2012. Additionally, revenue topped $142million, which was also 4 percent higher than the previous year. At the same time, Green Dot provided an improved full-year guidance, announcing that it expects operating revenue to come in somewhere between $565 million and $575 million and earnings per share to be in the $1.05 to $1.20 range. The better than expected results prompted Green Dot’s shares to jump 16 percent the day after its announcement.

    “Despite aggressive competition from large financial services companies and rigid self-imposed risk controls that materially reduced new customer enrollment, we believe Green Dot remains the clear leader in the prepaid space and is well positioned for the future,” said the company’s CEO Steve Streit. And far from going on the defensive, Green Dot also unveiled a distribution partnership with the likes of Home Depot and Dollar General, which will up its nationwide presence by about 20,000 retail locations.

    None of this is to say that Green Dot doesn’t face challenges, as Motley Fool contributor Jordan Wathen goes at lengths to explaining a recent post, citing in particular the threat posed by American Express Company’s Bluebird card. But whatever the threats may be, it seems clear that Green Dot won’t be going away quietly.

  • On The Hook? – The Advantages and Loopholes of Zero Liability.

    On The Hook? – The Advantages and Loopholes of Zero Liability.

    When you carry a credit, debit or prepaid debit card with a Visa or MasterCard logo, you’re entitled to zero liability protection should a thief make unauthorized purchases with your card. “Zero liability protection is essentially a choice made by plastic issuers to add an additional layer of fraud protection above what is required by federal law,” says John Ulzheime, president of Consumer Education at SmartCredit.com.

    “With zero liability protection, the issuer chooses to absorb any fraudulent charges made on a card.”
    Zero liability protection is a voluntary consumer protection from the ubiquitous card networks Visa and MasterCard and is provided to consumers through financial institutions issuing credit, debit or prepaid debit cards utilizing their logos. But there are some key loopholes and exceptions to zero liability protection to keep in mind,especially for debit and prepaid debit card users, according to the research and advocacy group Consumers Union. “If you put in a PIN to make a purchase at the register or put in a PIN at an ATM, you will not be covered,” says Michelle Jun, a senior attorney at Consumers Union. “That’s particularly important for debit and prepaid cards. You wouldn’t be affected as much with a credit card.”

    Here’s a look at how zero liability works (and doesn’t) with credit, debit and prepaid debit cards.
    Credit cards.

    Quite simply, credit cards offer the most protection. Thanks to the
    Fair Credit Billing Act, your liability is limited to just $50 if a credit card is lost or stolen. “Credit cards provide the most guaranteed protections under the law,” Jun says.

    And if you contact your card issuer as soon as you realize a credit card has been lost or stolen or your card account compromised, you won’t pay a penny of any unauthorized charges a thief rings up, thanks to zero liability protection offered by most card issuers. “Zero liability
    protection is not a requirement but given the competitive nature of financial services, not offering zero liability protection really puts you in a less attractive position,” Ulzheimer says.

    Debit cards

    The Electronic Fund Transfer Act offers federal consumer protections for unauthorized debit
    card transactions. But you’ll need to act fast to be as fully covered as possible. “With debit cards, you can limit liability to $50 or $500 depending on how quickly you make the report,”
    Jun says.

    If you report a debit card missing within two business days, your liability is limited to $50. But if
    you wait up to 60 days after your card statement was sent to you, you can lose up to $500. If you wait longer than 60 days, you can lose all the money that was taken from your account, according Beverly Harzog, credit card expert and author of the forthcoming book “Confessions of a Credit Junkie.”

    In certain instances, though, zero liability protection can help get the money back in your card account if a thief swipes a debit card. But remember, PIN-based purchases and PIN-based transactions at ATMs may not be covered. So if a thief gets hold of your PIN and goes shopping, you’ll need to act quickly to limit your liability. “Once it falls into the wrong hands, the money is gone,” Jun says. “It’s up to you to make a claim and defend your money.”

    Prepaid debit cards

    There are no federal consumer protections for lost or stolen prepaid debit cards. Not only that, but a
    report by Consumers Union found the voluntary zero liability protections offered for prepaid debit cards “insufficient” and stated there were “significant loopholes” with the coverage.

    For instance, Visa’s zero liability policy does not cover ATM transactions or PIN transactions that are not processed on the Visa network. And card transactions may take place on other networks even if the card has a Visa logo, according to Consumers Union. MasterCard’s zero liability policy
    also has loopholes, particularly for those who have been victimized by thieves in the past. Indeed, the MasterCard policy does not give any protection if a consumer reported two or more unauthorized events in the past 12 months, does not cover ATM or PIN transactions, and may require the card to be registered, according to the Consumers Union report.

    “It’s important to note there are zero liability protections but they aren’t bullet-proof,” Jun says. So what to do? First off, contact your issuer as soon as possible if a thief swipes your prepaid debit card. And check for voluntary consumer protections in your cardholder agreement. “Of course nobody wants to go back and read the contract but if it means you’re going to get your money back it may be something worth doing,” Jun says.

    Just be aware that with prepaid debit cards, consumer protections for unauthorized use are voluntary and can be changed or rescinded by the issuer at any time. “Hopefully you’re dealing with a company that’s very reputable and will stand by their word,” Jun says. But if you do have trouble with your card issuer following the theft of a prepaid debit card, you can report the incident to the Consumer Financial Protection Bureau.

    While there’s no guarantee that a complaint will get money back into your account, the bureau vows to contact the card issuer on your behalf and request a response, which it will then share with you. If nothing else, the Consumer Financial Protection Bureau says that complaints helps it to write better rules and regulations so that it can better address recurring problems in the future.

Prepaid Debit Card Reviews, Complaints, Etc