WASHINGTON—The Federal Reserve has fined Green Dot $44 million for consumer compliance breakdowns, including numerous unfair and deceptive practices and a deficient consumer compliance risk management program.
“Green Dot violated consumer law in its marketing, selling, and servicing of prepaid debit card products, and its offering of tax return preparation payment services,” the Fed said. “For example, Green Dot failed to adequately disclose the tax refund processing fee for tax preparation services offered on a third party's website. The firm also blocked access to accounts of legitimate customers receiving unemployment benefits and lacked reasonable policies and procedures to help those customers cure those blocks. In addition, Green Dot did not maintain effective consumer compliance risk management and anti-money laundering programs,” the Fed said.
Steps Firm Must Take
The Fed is requiring Green Dot to take several steps to improve its programs, including:
- It must hire an independent third-party to strengthen its consumer compliance risk management program and address the root causes of consumer complaints
- It must develop an effective anti-money laundering program and hire an independent third-party to conduct a review of certain transaction activities