Security & Fraud

FTC Announces NetSpend Is Refunding Customers As Part Of A Settlement

The Federal Trade Commission announced Thursday (June 15) that NetSpend, the operator of a debit card, is providing refunds to settle charges that people couldn’t access their money in their NetSpend accounts.

In a release, the government agency said NetSpend is sending notices by email and mail to people who are eligible for a refund. The emails tell how to request a refund using an online form. The paper notice contains a printed form to return. You have to apply to NetSpend to get your money back. And you have to apply by Oct. 7, 2017. The FTC noted NetSpend will mail a refund check within 30 days after the customer makes the request. The refund is for all the money that was lost by the customer.  The FTC warned consumers to keep in mind they don’t have to pay to get a refund in any FTC cases.

In April after a lengthy legal process with the Federal Trade Commission (FTC), the NetSpend Corp. reached an agreement. The company, which serves those without a bank, specializes in providing prepaid Visa debit cards. On Nov. 10, 2016, the FTC alleged that NetSpend betrayed its customers regarding the access to money transferred onto its prepaid debit cards. Specifically, the FTC’s complaint put into question some of NetSpend’s marketing messages. Under the USA Patriot Act, the FTC claims NetSpend’s marketing did not verify consumers’ identities before accounts were activated. The case examined a certain number of NetSpend user accounts between January 2010 and August 2016 and determined the necessary steps to verify identities prior to activation were not taken. To help resolve this, NetSpend will continue working with these users to access funds that reached an excess of $40 million. Since September 2016, $3.6 million of that large balance has been accessed by cardholders. The company also plans to refund the $13 million in fees charged before August 2016.

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