The Consumer Financial Protection Bureau (CFPB) has issued its February 2016 Complaint Snapshot. The Snapshot's product spotlight covers Prepaid Products.
Prepaid products are a type of consumer financial products that serve unbanked and under-banked households. These alternative consumer accounts can be loaded with funds by either a consumer or a third party and allow people to make payments, store funds, and withdraw cash.
The CFPB proposed prepaid product rules in 2014. The Bureau plans on releasing its final rules on prepaid products sometime in 2016.
The Bureau's findings regarding prepaid products include the following:
- Inability to access funds on card: The Bureau found that consumers have complained that, for an extended period of time, they were unable to access funds loaded on their prepaid cards.
- Prepaid cards re-issued without former balance: The Bureau found that consumers have complained that when their prepaid cards expired, the company that issued the initial card often refused to re-issue a card with the remaining balance before their original card expired.
- Account access problems when disputing particular charges: The Bureau found that customers who wanted to dispute an unexpected charge complained that after contacting the company about the issue, the entire balance on their card would be frozen while the claim was under review. The claim process could often take an extended period of time, during which the consumer would be unable to access important funds.
- Fees incurred by the use of prepaid cards: The Bureau found that some consumers have complained about a wide variety of charges, including monthly, inactivity, transaction, balance inquiry, PIN change, and overdraft fees.
The Bureau's general findings include the following:
- As of February 1, 2016, the CFPB has handled 811,700 complaints nationally. The three most complained-about financial products were debt collection, mortgages, and credit reporting. Overall, the CFPB saw an 8 percent increase in complaint volume between December 2015 and January 2016.
- In a comparison of November 2015 through January 2016 with the same time period 12 months before, complaints about other financial services, which include complaints about check cashing, credit repair, debt settlement, foreign exchange services, traveler's checks, tax refund anticipation checks, and money order providers, rose by the greatest margin, at 77 percent.
- Payday loan complaints showed the greatest percentage decrease from November 2014 – January 2015 to November 2015 – January 2016, about a 12 percent decline.