The FTC announced this week that the staff of the Commission’s Bureau of Consumer Protection had provided comments to the Consumer Financial Protection Bureau (CFPB) supporting expanded protections for users of general-purpose reloadable (GPR) cards. The comments are in response to the CFPB’s advance Notice of Proposed Rulemaking, announced in May 2012, which sought comments, data and information from the public about the costs and benefits of extending additional protections to the users of GPR cards.

GPR cards are prepaid cards that are issued for a set amount but are also reloadable, so that consumers can add funds to the cards. Use of GPR cards, like other so-called gift cards, has skyrocketed over the past several years. Both the CFPB and FTC are concerned that users of the cards may not be aware that certain federal laws that apply to other types of payment cards, such as credit and debit cards, do not apply to GPR cards.

In its Notice of Proposed Rule Making, the CFPB advocates for the extension of Regulation E, which provides protections to users of debit cards, gift cards and various other types of payroll and benefit cards, to GPR cards.

In its comments, the FTC staff focused on four types of protections that have been applied to other payment cards:

  • liability limits for fraud and unauthorized use;
  • disclosure of fees and expiration dates;
  • error resolution procedures; and
  • recurrent payments.

Click here to read the FTC’s press release and access a copy of the comments supplied to the CFPB.