Senate Committee Probes Prepaid Account Failures

As part of regulatory measures to crack down on the prepaid market, members of a U.S. Senate committee are putting Walmart, MasterCard and Green Dot leaders in the hot seat.

This is a result of the prepaid debit card glitch that occurred last month when Walmart shoppers tried to access their Green Dot card accounts. Reportedly the glitch lasted for several days and left users unable to view their account balances or activate new cards.

Customers were also reportedly not being declined for purchase. These specific cards that are being scrutinized are cards that use MasterCard’s network but are issued by Green Dot.

Social media blossomed in the wake of these issues, where some users said the outages had lasted several days.

Green Dot also said that it had run into some issues with its transaction processing partner, MasterCard Payment Transaction Services, with slowdowns being experienced across some systems, and that some balances were not accessible regardless of the conduit. They still could, said the firm, check up on the current account balances through text messages or mobile applications.

But, said Green Dot last month when the incident occurred, in referring to fund access: “There is no impact to the ability to make purchases or get cash from ATMs.” Green Dot went on to state: “Reloads are all posting properly. We understand the important role we play in the daily financial lives of our loyal customers and apologize for any inconvenience this may cause.”

Two members of the Senate Banking Committee sent letters to the CEOs of Green Dot, Walmart and MasterCard to learn more information about the issue and how many consumers were impacted.

“These service interruptions are a clear indication that more oversight and consumer protection is needed in the prepaid card market,” said the letters, signed by Senator Sherrod Brown of Ohio and Senator Robert Menendez of New Jersey, both Democrats, according to a Wall Street Journal report.

The senators also asked if this issue had been reported to the CFPB. The bureau has been taking a stricter look into the prepaid card market in general.

In terms of how MasterCard handled the incident, the company said during that issue there was a slowdown for some Walmart cardholders, but said: “We caught it right away and worked closely with Green Dot to address the issues.”