Prepaid debit cards that include the Visa or Mastercard logo provide a sensible alternative to regular credit cards. The concept sounds great – load your card with a certain amount of cash and you can’t overspend and get yourself into trouble with credit card debt.
Companies like Green Dot Visa though are being accused of hiding inordinate fees from their customers – examples include a $6.95 activation fee that comes off a person’s balance when they first use the card or a $5.95 monthly fee for balances under $1000.
These cards primarily appeal to lower income Americans and immigrants, those with the inability to open a bank account or apply for a credit card. Approximately 80 million Americans never interact with a bank. Green Dot and other prepaid debit card companies target these types of consumers while neglecting to mention these fees.
A Green Dot customer in Colorado recently had trouble with the balance on his card. After purchasing a card and making two deposits at his local 7-Eleven totaling just under $500, he was shocked to find that the second deposit never made it on his card.
He has tried contacting Green Dot several times to try and find the missing funds but has had no luck in getting a straight answer from the company. He has been successful in recovering the $270 from the 7-Eleven but neither he or the store has had any success in resolving the issue with Green Dot. After researching the company online, the ex-Green Dot customer found some people who are considering a class action lawsuit against the company.
“If it was $20, I probably wouldn’t care, but it was $270. That was money for Christmas presents,” comments the bewildered customer.
My suggestion is you definitely read the fine print when dealing with these cards. I certainly understand their utility but since it’s such an unregulated business, you have to take into account that there may be charges they are not going to be eager to tell you about.
If you feel you have been wronged by one of these companies or like the gentleman in Denver, you’re having trouble resolving an issue like his, please let me know.
Contact my Colorado fraud lawyer firm, The Babcock Law Firm, today for a no-risk, no-fee consultation.