The Federal Trade Commission (FTC) announced that it is sending out more than 430,000 checks totaling more than $10 million to those impacted by Netspend’s prepaid mastercard misleading claims over its reloadable prepaid debit cards.
Netspend serves those without a bank, specializing in providing prepaid Visa debit cards.
On November 10, 2016, the FTC alleged that Netspend betrayed its customers regarding the access to money transferred onto its prepaid debit cards, with promises that they would have immediate access to funds, with “no holds and no waiting.”
The complaint alleged that for some of the affected users, the lack of access to these funds resulted in evictions, vehicle repossessions and the like. Even once those consumers had asked for refunds, the waits continued — sometimes for weeks. At the same time, Netspend levied fees that helped drain funds even further.
Netspend came to a card holder agreement for details with the FTC last year, promising to work with affected users to access funds that reached an excess of $40 million.
The company also agreed to refund the $13 million in fees charged before August 2016.
“Since resolving this matter last year, Netspend has worked diligently to help consumers access their funds. We remain committed to our core mission of empowering under-banked consumers with the convenience, security and freedom to manage their daily financial lives,” the company said in a statement.