We support reforms to the financial marketplace to curb bad practices by banks and lenders.
We found a couple of cards marketed specifically for parents to use to help teach children about money management. The fees were ridiculous and ever-present.
Prepaid Cards
Prepaid cards are the newest plastic payment cards. They look like debit cards with a logo from a major card network. Consumers are likely to purchase these cards for a fee, and often pay additional fees to use the prepaid funds loaded onto the card to make purchases or pay bills. These cards function much like a debit card linked to a bank account, but do not have the same guaranteed consumer protections. Gift cards issued by a retailer have different laws. Click here to learn more.
Publications
- CU letter to the National League of Cities on hybrid municipal prepaid cards
CU is concerned that some prepaid cards issued recently by cities do not provide consumers with the kind of fair deal consumers deserve
- CU letter to the International City/County Management Association on hybrid municipal prepaid cards
CU is concerned that some prepaid cards issued recently by cities do not provide consumers with the kind of fair deal consumers deserve.
- Comments to the CFPB on Prepaid Cards
FINAL Cmt ANPR Prepaid 7.23.12
- CU Comment on electronic payments for federal financial aid
ED_EFTComment5.31.12
- Prepaid Cards: Loaded with Fees, Weak on Protections
Prepaid Cards: Loaded with Fees, Weak on Protections
- CU comments to the proposed Department of Treasury’s Interim Rule allowing federal payments to be deposited onto prepaid cards
The National Consumer Law Center, on behalf of its low-income clients as well as the Consumer Federation of America and Consumers Union, submit these comments regarding the Interim Final Rule allowing federal payments to be deposited on prepaid cards. We particularly commend the Treasury Department for the new consumer protections required to be provided to Continue Reading
- Adding It All Up: How Prepaid Card Fees Compare to Checking Account Fees
Adding It All Up: How Prepaid Card Fees Compare to Checking Account Fees Prepaid cards are reloadable cards that can be used just like checking account-linked debit cards and are becoming the foundation of a second tier banking system used by a growing number of consumers. While prepaid cards are becoming increasingly popular, consumers who Continue Reading
- Tips for prepaid card customers
Tips for prepaid card customers • Find and read the fee schedule before you buy the card: Make sure you understand all the different ways you can be charged for using your card. Your cost will vary widely depending on which card you pick and how you use it. • Try to figure out how Continue Reading
- Group letter calls on FDIC to make safe template for prepaid cards
To: Federal Deposit Insurance Corporation SafeAcctPilot@fdic.gov From: Calvert Asset Management, Inc. Consumer Action Consumer Federation of America Consumers Union National Consumer Law Center® (on behalf of its low-income clients) Sergeant Shriver National Center on Poverty Law Re: Safe Transaction Account Template for Prepaid Cards Date: November 24, 2010 Calvert Asset Management, Inc., Consumer Action, Consumer Continue Reading
- Prepaid Cards: Second-Tier Bank Account Substitutes
Prepaid Cards: Second-Tier Bank Account Substitutes Consumers Union, the nonprofit publisher of Consumer Reports ® By: Michelle Jun, Staff Attorney With Consumer Federation of America and National Consumer Law Center, on behalf of their low-income clients September 2010 Prepaid cards are widely marketed as more convenient, safe and cost effective, a straightforward way to manage Continue Reading
Press Releases
- Consumers Union urges cities to avoid unfair prepaid card practices
CU raises concerns about high fees and weak protections as cities begin issuing prepaid cards
- CFPB considering new prepaid card protections
Financial watchdog announces plan to develop better fee disclosure and other protections for consumers
- Prepaid cards: Loaded with fees, weak protections
Consumer Reports finds prepaid card fees can add up and consumers lacking strong protections
- CFPB urged to enact prepaid card protections
CU: Consumers need the same protections for prepaid cards that come with traiditonal debit cards
- Prepaid cards costlier than basic checking accounts
Consumers Union finds checking accounts are cheaper and provide stronger protections than prepaid cards.
- Kardashian sisters back out of prepaid card deal
Consumers Union calls for stronger prepaid card protections for consumers
- Kardashian Kard: Weak protections and fees
Consumers Union highlights the downsides of prepaid cards and offers tips to consumers.
- Report: Prepaid cards come with long list of fees
CU report finds prepaid cards come with multiple fees and offer weak consumer protections
- Feds propose end to checks for benefit recipients
CU urges Feds to let consumers continue receiving benefits by check and to improve electronic payment options
- Rebate cards come with fees and other gotchas
CU offers tips to consumers on getting the most from rebate cards
Blog Posts
- City Of Oakland Takes A Step In Right Direction
The City of Oakland is one of the first municipalities in the country to issue a combination identification card with a prepaid card feature and unfortunately did so without any input from consumer advocates. As a result, the card had many anti-consumer features and was loaded with fees. At first, the City of Oakland resisted Continue Reading
- Oakland City ID Cards – Great Idea, Bad Fees
In an effort to provide Oaklandites with city identification cards, officials fell short with respect to the prepaid aspect of the card. Unfortunately, the fees associated with the card come fast and often. The SF Chronicle did a great investigative piece that cited CU’s Michelle Jun analysis. The organization, which has examined a variety of prepaid cards for several Continue Reading
- Consumers Shifting Away From Banks
According to a recent Wall Street Journal article Middle-class Americans are spending less time in the bank lobbies their parents would recognize. Today, 8.2% of the nation’s households—nearly 12 million—are managing their finances without a bank, according to Census-based data the Federal Deposit Insurance Corp. will make public Wednesday. That is up from the 7.7% Continue Reading
- What’s Behind the Magic Prepaid Card
There’s another prepaid card on the market today, the Magic by Magic Johnson prepaid card., issued by OneWest Bank. We found the fee schedule to be fairly straightforward. Here’s a quick summary: One-time set up fee: $4.95 This fee is waived if at least $50 is initially loaded onto the card. Monthly fee: $4.95 Continue Reading
- Campus Debit Card Trap Unveiled
U.S. PIRG recently released an in-depth report, “The Campus Debit Card Trap,” on banks and companies who are in the business of disbursing federal student aid money on debit and prepaid cards. They looked at nearly 900 card partnerships between colleges and banks and financial firms which impacts over 9 million students, or over Continue Reading
- Suze Orman’s Prepaid Card: What is in the fine print
There has been a lot of buzz around Suze Orman’s new prepaid card. However, a prepaid card is still just a prepaid card and consumers should pay attention to the fine print. Here are some take-aways after looking at the fine print of Suze Orman’s new prepaid card: Fee Summary: Monthly fee $3 (first month Continue Reading
- College Students Raise Concerns About Higher One Card Fees
A small group of students and parents at Western Washington University are taking their consumer rights seriously.
- Great New Coverage On Our Prepaid Card Campaign
Watch the video “ConsumerWatch: Prepaid Reloadable Cards May Come With Fees” featuring our own Michael McCauley
- New “Club América” Prepaid Card Takes Aim at Soccer Fans
A new prepaid card endorsed by the Club América soccer team is being marketed to soccer fans in the U.S. Goal…or foul?
- The Kardashian Kard May Be a Goner – After Only 3 Weeks!
The Kardashian sisters are backing out of their contract to promote their prepaid “kard,” after receiving massive criticism in the media and a warning from a state attorney general. Looks like not all publicity is good publicity!
Worried about retirement?
The stock market has been unusually volatile, plunging hundreds of points, creeping back, only to plunge again. It is hard to stay disciplined about saving when every dime you’ve invested can evaporate in a day.
What is your biggest concern about your own retirement? We want to hear from you.
Where to complain
Online, by mail, phone or fax... Agencies need to hear from you!