FTC says NetSpend decked consumers with deceptive claims for prepaid debit cards

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From the perspective of consumers, the whole purpose of prepaid debit cards – their reason for living, if you will – is to give consumers immediate access to their money. Those cards are an especially important financial lifeline for people who don’t have traditional bank accounts. In pitching its reloadable prepaid cards, NetSpend Corporation promised consumers “immediate access” to their funds with “no holds, no waiting.” But according to an FTC complaint, the defendants’ business practices rendered that claim and other representations deceptive.

“Immediate access”? Not so fast, alleges the FTC. NetSpend’s ads were replete with claims like “No Waiting!” and “Use your card immediately.” But the FTC says many consumers experienced delays in accessing their funds both in the initial activation process and later. For example, despite the company’s “use it today” claim, consumers have to go through an identity verification process required by law before the prepaid debit card can be activated – a process with requirements many people have difficulty satisfying.

The upshot? People who loaded funds onto NetSpend cards often had to wait – and wait and wait – to access their own hard-earned money. The FTC says those delays resulted in severe financial hardship to consumers, including evictions, repossessed cars, and late fees on bills.

The complaint also alleges that many customers who closed their accounts and asked for refunds had to wait several weeks to get their money back. In other cases, NetSpend imposed fees that depleted the funds from cards after consumers were unable to activate them.

The complaint takes on other instances in which NetSpend’s business practices were at odds with its marketing claims. For example, the lawsuit challenges as misleading NetSpend’s representation that consumers are “guaranteed approval” for a card. The FTC also alleges that NetSpend said it would grant provisional credit when consumers dispute charges on their cards, but often failed to live up to that promise.

The lawsuit was filed in federal court in Atlanta. If you work in the financial services sector or have clients interested in alternative payment methods, this is a case to watch.

 

Comments

Netspend declined my own order to my wholesale company and the told me from 173.13 balance my company has pending transaction for 84.95. When company said it declined and I didn't get my order. Then tell me I have a 4.?? Some balane. Excuse me bit subtract 84.95 from 173.13. I don't get 4.?? Balance sir! He didn't say a word.. I need to file claim asap. Ugh! Ridiculous!

Netspend AND PayPal have ruined my credit. They made me pay for bogus charges for 4 years. These stupid cards were opened in my name: Fraud is a felony.

These people have u doing their work then say they would do this or that says they provide a service but never does I want in on this lawsuit

Insight was no help my card was stolen funs gone and they say no they can’t reimburse me for anything I’ve lost due to the fact I stated I memorized my pin due to the fact money with drawns was also made in the pass they were no help to me in my situation they have failed me.

They are luring you with a free amazon gift card then they have you claim your card after a survey then they have you signed up for their card the bait and switch so now instead of the promised amazon card i have a netspend card with no balance and no gift card i knew it to be a scam but wanted to see how blatant they are now i have proof of the scam for the bbb

i was told by netspend last month my card was used in 2 states with in mins of each other, at a store terminal, all I got was a canceled card, no access to pay my bills for 10 days and no refund of the $220.00 that was used

Do not get a NetSpend card more headache than what it is worth

They told me I won $1000 Amazon gift card , took all my information and said I would get card in 2 weeks . Visa Card came with no money. Called customer service and they were clueless, only saying I had to load money on the card

Haven't reserve my money or my refund from net spend or account now

Most of you people ( I didn't read all because I couldn't get through all the bullshit) are lying talking about months & months because if it did happen like that you wouldn't keep using it, so save the fake bullshit for people who has issues that are real & not frivolous.

My issue is when after you make a claim, u have to wait soooo long to get a answer because all no god forbid that they give u the money back no questions asked like a regular bank but ok. It takes 10 days for existing accounts & 20 for new ones. So they told me 10 days & I have to write a letter describing the incident ( & that's for them to even give u a provisional credit). You have to wait till the end of the specific day they tell u in order to get an update. I have received credits before & I also been denied one too after waiting so fucking long. So who do you talk with about this problem??

Take them to arbitration!

I have this exact same priblem with them now for the amount of 303.00 and all i want is my money back and i dont know what else to do ive already been waiting 15 days with no result shakin my head i need to report netspend greedy shady company to someone asap

You can report problems to the FTC at www.FTC.gov/Complaint. The information you give goes into a secure database that the FTC and other law enforcement agencies use for investigations.

we've been fighting with them for a month. we've provided police reports, pics and all, yet they still deny our claim, claiming we used it after reporting it being compromised. We didn't know we had been compromised until January 2020, but the culprit started using it in November of 2019. How could i use my card if i reported it stolen to NetSpend? not possible. We even got a $1000 loan to cover us during the month of december, but again didn't know someone was nickel and diming us. NetSpend then says since we loaded our card during this period, we must have known. Do they really think we'd lie about $1750. My wife has an incurable brain disease, we couldn't risk her health or freedom by filing a false claim. The second our card was declined we checked our transaction history by phone and then realized someone had gained access to our account.

Basically if they deny your claim they are suggesting you, their customer, is a liar and criminal which couldn't be further from the truth. My next step is filing with The Consumer Financial Protection Bureau.

Been waiting Three weeks for refund. Put money on card called to activate and was told that I cannot ever use NetSpend again. Still have not received my refund. Never activated the card so my deposit should be right there and ready to return, why the delay.

There a fraudulent company ....the will have your information on ACCTS if you have others with them and still say they need verf.. How f you personal documents sent to them while with holding your money. But its very clear there is nothing been done about the deceptive trade practices.They still get away with this and at the consumers money. Also will say that funds were not withdrawn from your acct and they actually were. Beware don't go through this like I did !!! Very deceptive company

My Son has over $600 on the card his job forced him to take. Now they locked him out of his account, are depleting his funds, and DEMANDING that he send a copy of his BIRTH CERTIFICATE, SOCIAL SECURITY CARD, ID, and ADDRESS. Are they trying to steal his identity???? There is no way we would send COPIES OF THIS PERSONAL information!!!!!

I just put money on my card i went to buy some work things and the card wont work, so i go to log into my account and it says its locked. sent email no response just called them and they said all they could do is reset my password so i had them do it just typed in new password and still says the account is locked now i have money on a card that i cant use

They're still playing the same game, even after being sued. They direct deposited my funds onto my card in May, but it took three weeks to get my card.I had my paycheck sitting on a card that I didn't get. I had to file a claim with the BBB to get some action. They charged me a fee to send out a new card. I got my card, Fed-Exed and the company reimbursed me the costs because I was lied to and could prove it. You have to light a fire under their asses.

Always read the fine print before activating the card I got a offer from net spend in the mail I opened it up read there are hidden fees you need to beware of the ads are deceptive and misleading I called the number immediately and deactivated the card there are fees they charge you

Netspend prepaid debit card is issued by meta bank of Sioux Falls South Dakota they claim get paid up to 2 days faster read the fine print before you activate the card I read the fine print all the fees

Is it to late to file complaint?

In September, the FTC mailed checks to NetSpend debit card customers who weren't able to get their funds. The FTC said that people weren't able to get their funds because NetSpend either denied or delayed activation of their card, or because NetSpend blocked them from using it.

If you have questions about the refunds, please call the refund administrator at 888-684-4858.

Every transaction I make on my netspend card i get an additional preauthorization charge. That puts my balance in the negative and can't use my card for a week until they cancel it. Charges over $200 dollars they put a preauthorization charge on my account for a month. It has been very crippling to me to the point I can't pay bills, or buy food. Guess they win, consumer loses.

You can report a problem with a business to the FTC at FTC.gov/Complaint. The information you give will go into secure database that the FTC and other law enforcement agencies use for investigations.

They took my money. They continually blocked my cards. I had 200$ on my card that mysteriously disappeared. Tried calling customer service numerous times and they never helped me. Horrible company

Thanks for all the comments. I am glad I found this site. I got enticed with this Netspend reloadable thing (and I had no good reason because I have completely working traditional debit and credit cards). Good thing I loaded it with just under $50 to test it. Now the card wouldn't activate I had to go through a call center. After making me answer so many questions over the phone, I was instructed to upload pictures of important personal documents. I was iffy about doing that and after reading all the comments here I will definitely just toss this card in the bin. Not worth activating it and my only regret is that I have given my personal details over the website and the phone. I don't trust this company at all.

I purchased a net spend reload card 7/11 transact! I tried to activate it ! But net spend says I can’t activate the card Becca I owed them money!! But I got a settle check! So I didn’t owe them anything! 3/16/2019 $60 reload! Now have been waiting on refund ! That said they sent it!! But never receive they giving me the same answer it’s been mailed out no it haven’t they are holding my money!! And losing saying they did

They have stolen 269.96 off my Netspend card and spent it somewhere in California I’m from Boston I have made multiple calls complaints to NetSpend and the place that charged my card they are all making me wait for my hard earned direct deposit money from my job I will now be late paying bills and have many late fees they let a person spend money I would never of spend and it was in usual activity they still did nothing and haven’t returned my money in days now

On April 16, 2018 my netspend card was fraudulent used resulting in 4 transactions within 8 minutes in Monaca Pennsylvania and Lowes store #500 totaling the amount of $703.70. I live in Oakland California and I find it appauling that Netspend did not think anything about the transaction. That night the merchant lowes refunded 1 of the transactions crediting me $85.82 back. However, the 620.00 is in dispute and I am being forced to wait. I am confused because why give me one credit rather than all 4? Netspend is telling me also I have to wait until lowes respond to the other disputes. Lowes says I have to wait on netspend in order get the funds back. I am 8 months pregnant and I am stressed out to the max right now. You charge and take the money quickly, but it takes forever to get it back. After this is over I am leaving netspend because they are not protecting their customers and are causing financial pain to hard working people. After all these years I realize they are mini crooks.

Is anyone doing anything about this company? They still advertise PayPal as a partner but after being unable to transfer funds to it was told by PayPal that the routing number was banned in their system...

I have been with NetSpend since 2007 I get my childrens death benefits check directly deposited .. and so many times I have disputed transactions and they always say they don't have enough information or I have to write someone a letter with my complaint and they will review it however I have never got my money back and they still don't stop them from continuing to take out funds. I've also proven and they only give me back one month back whenever that same company had been taking funds out for several months but they never refund that money . Also They claim I will get my check 2 days faster however my check never has come consistently. One month it may come on the 27th the next month it may come on the 2nd I never really no.. so I have to constantly check which they charge me for every single time I contact them 50 cents for there inconvenience.. not to mention this company has been allowing my account to be overdrawn every single month I owe them $100.00 + dollars and ALOT of them transactions is there constant $15.00 overdraft fees .. every time someone try's to take funds AUTHORIZED OR NOT out another $15.00 fee repeatedly comes out. So if you can help me I would love to get with someone who can help me figure out if and when I can get my money back

You can report this problem to the FTC at www.FTC.gov/Complaint. The information you give will go into a secure database that the FTC and other law enforcement agencies use for investigations.

WHEN I WENT TO WALMART AND MY NETSPEND PREPAID CARD DECLINED , THEY SAID THEY CLOSED MY ACCOUNT AND SENT MY MONEY TO ME BECAUSE I DISPUTED ERROR TRANSACTION THATS WHY THEY CLOSED MY ACCOUNT. AND WHEN I APPLIED ANOTHER NETSPEND PREPAID, THEY DENIED ME.

Did you ever receive a check in the mail I’m going thru the same thing .

I've been trying to give brinks prepaid card claims dept

I had an old account years ago..well I just tried to activate a new card and called NetSpend..they said my old account had fraudulent activity..I'm so angry I never did anything wrong ...they are horrible

I got two Net Spend cards in the mail and never ordered them. I don't know whether I should call them and make sure they are cancelled!

I want in as well this is the 3rd time they took my money and not able to get my money for weeks causeing me to be homeless.i want to shut them down in coart

I am cancelling my cards. Awful customer service ! and they wanted to have 3 different IDs ... Very sick ! Hard to understand !

Someone please help me!!!! Netspend sent me a business debit card which I've used with no issues until they had suddenly decided to place my card on-hold after I deposited $400 into my card -due to a business verification process?? This is ludicrous!! This was the only money that I possessed at thw time and till tjis day, I still have not received my $400!!!! Netspend shouldn't get away with defrauding consumers. I worked hard for this mkney and it was the only money that I had remaining. Now I'm practically out of business and homeless as o wasn't abke to pay my bills. I worked from home and now I have no where to go.

I amgetting a lawyer and I am going to sue this company for erything they owned they are a bunch of frauds and have stolen $250 from me and my son it's all on I until I get my money back it's on

I bought a NetSpend reloadable card at a 7_11 gas station loaded it with $120 and they froze it upon activation been 5 days now and nobody can tell me why

I had a net spend card I lost did they replaced it and several days later they said I did some kind of fraudulent act and completely took me off of Netspend I asked what did I do wrong they told me my name was connected with something fraudulent

Just got a NetSpend PayPal debit prepaid card and put $20 on it and was trying to activate it online, through phone and PayPal application to no avail. It just says that 'something went wrong' and 'we're not able to complete this transaction'.

I have bought a Netspend preload Visa for my son to use as I did not want him to have a regular Visa due to his age. He never got to use the money. I called today to check on the balance. I learned from the customer service that they can't even look at the balance b/c it was not activated in 4 months. My card says "good through 6/20". Reading the comments here this company has a pattern of defrauding people. How are they still on the market? The customer service person was scripted and would not even pass me along to a manager. They know what they are doing. This is just sad that stores are still selling their products when consumer money is getting taken form them by Netspend with no intention of allowing use of their product to retrieve the preloaded cash. Horrible business!

You can report this to the FTC at www.FTC.gov/Complaint. The information you give will go into a database that the FTC and other law enforcement agencies use for investigations. The comments you put here on the blog don't go into the enforcement database.

This is a legal way to rob regular citizens too confident because nobody at the moment of purchase give you any hepfull information in what is being purchased, only when paid, you open a plastic wrap to discover a terrible mistake, this thieves should be stooped .

I feel like they taking extra money out of my account

Direct Deposit Scam! I changed my direct deposit from my BofA checking to my Net Spend Prepaid Debit card to avoid my car insurance from lapsing. In the state of Nevada you can not be without auto insurance for 24 hours or you will receive a $500. DMV fee, plus cancelled registration and penalty and fees from the courthouse. I changed my direct deposit to Net Spend to avoid fees and penalties however my direct deposit never credited to my long standing Netspend account. My car is at risk of repossession. I scheduled a payment with my car company to avoid repossession, my car payment was declined so Im screwed. I want to SUE!!!!!!! For all damages incurred due to their FAILURE to uphold their advertisement.

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