Last May, some shoppers reported being unable to pay with their Walmart MoneyCard in Walmart US department stores during several days. The three companies involved, namely Walmart, MasterCard and Green Dot, have been urged to give an explanation at a time when regulators are striving to strengthen regulations in the prepaid card market.
The prepaid Walmart MoneyCard uses the MasterCard network and is issued by Green Dot – one of the most important prepaid card providers in the United States. Affected customers declared that they could not check their account balance, obtain a new card or pay with it at checkout for several days, posing serious problems. Indeed, most of the prepaid card holders are low-income workers without bank accounts that have their paychecks automatically deposited on their prepaid card.
Democrat Senators Sherrod Brown and Robert Menendez, members of the Senate Banking Committee, asked chief executives of the three companies to provide details of the failure. According to them, such issues show that the prepaid card market needs to be monitored with more attention. Furthermore, prepaid card customers don’t currently benefit from the same protection as bank account- and credit card-holders. The Consumer Financial Protection Bureau released a proposal in November 2014 to strengthen regulations and close existing gaps between the sectors. A final version should come out in the coming months.
Both MasterCard and Green Dot acknowledged “technical issues” and said that they are working to prevent further disturbances. Since July 2014, the Consumer Bureau registered more than 5,000 complaints about prepaid cards.
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