The Consumer Financial Protection Bureau (CFPB) released its latest monthly consumer complaint snapshot on Tuesday (March 1), showing a spike in recent months in the number of complaints from consumers about prepaid products.
“Prepaid products provide a crucial financial lifeline to many unbanked and underbanked households,” CFPB Director Richard Cordray said in a 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 increase in complaints about prepaid products was mainly attributed to issues with consumers being frozen out of their accounts. As of Feb. 1, 2016, the bureau said it had handled nearly 4,300 complaints related to prepaid products.
Despite being one of the fastest-growing types of payment methods in the country, many consumers had issues with their prepaid products, including the inability to access funds on card, the card being reissued with former balance, account access issues and fees when using the card.
The CFPB noted that a significant number of the complaints it received about prepaid products were in relation to the recent RushCard paycard issues.
In the wake of continued difficulties that prepaid RushCard holders had in accessing their funds, Cordray weighed in on the matter directly late last year.
Noting that many consumers using the card had been unable to withdraw funds for more than a week, Cordray issued a statement that contended “the CFPB is taking direct action to get to the bottom of this situation that may have harmed thousands of innocent consumers already.”
The executive noted that he had spoken with Rick Savard, CEO of UniRush, which issues and services the RushCards, in order “to make sure that action is being taken” to address the ongoing situation, including “the cascading financial effects” of the inability of funds to be withdrawn and used. Further, stated Cordray, the CFPB stands ready to “use all appropriate tools at our disposal to help ensure that consumers obtain the relief that they deserve.”