WASHINGTON–The Consumer Financial Protection Bureau is reporting it has seen a spike in recent months in complaints related to prepaid cards.
As part of its latest monthly consumer complaint snapshot, the CFPB said the increase in those complaints largely has to do with being frozen out of their accounts. As of Feb. 1, 2016, the Bureau said it had handled approximately 811,700 complaints across all products.
“Prepaid products provide a crucial financial lifeline to many unbanked and under-banked households,” said CFPB Director Richard Cordray, in a released statement. “It is important that consumers who rely on this important financial product can do so safely and efficiently, without undue hassles and runarounds.”
The CFPB said that as of Feb. 1, 2016, the Bureau has handled approximately 4,300 prepaid product complaints. Some of the findings in the snapshot include:
- Inability to access funds on card: Consumers complained they were unable to access funds loaded on their prepaid cards for an extended period of time.
- Prepaid cards re-issued without former balance: Consumers complained that when their prepaid cards expired, the company that issued the initial card often refused to re-issue a card with the remaining balance before their original card expired.
- Account access problems when disputing particular charges: Customers who wanted to dispute an unexpected charge complained that after contacting the company about the issue, the entire balance on their card would be frozen while the claim was under review. The claim process could often take an extended period of time, during which the consumer would be unable to access important funds.
- Fees when using prepaid cards: Some consumers complained about a wide variety of charges, including: monthly, inactivity, transaction, balance inquiry, PIN change, and overdraft fees.