A new month, a new batch of complaints to the CFPB from consumers.
This month’s spotlight player was prepaid products — and the difficulties consumers experience in their use and management.
“For many unbanked and underbanked consumers, prepaid products are a vital source of financial security,” said CFPB Director Richard Cordray. “We want to make sure consumers using prepaid products can easily access their funds and companies are working to resolve consumers’ issues.”
The spotlight on prepaid complaints comes about a month after the CFPB finalized rules requiring financial institutions offering prepaid products to limit consumers’ losses when funds are stolen or cards are lost, as well as new Know Before You Owe disclosures for prepaid accounts. As of Oct. 1, 2016, the Bureau had handled approximately 6,000 prepaid product complaints of the 1,008,500 complaints is has received across all products — or ~.006 percent of all complaints.
Consumers’ main issue was with unauthorized transactions — or charges they did not recognize appearing on their accounts. Some of these consumers complained that when they submitted a dispute to the company about a transaction, their cards would be cancelled without notice.
Other complaints were about difficulties in registering their cards — or that inaccurate information was hard to correct.
Consumers, when they complained (rarely), noted that claims on stolen funds led to prolonged inability to access their funds. Additionally, consumers complained about lengthy delays in receiving credit on their cards after notifying the company of a fraudulent or unauthorized transaction.
American Express, PayPal Holdings, Inc., and NetSpend Corporation were the three companies about which the CFPB has received the most prepaid product complaints.