CFPB tackles prepaid card complaints

The Consumer Financial Protection Bureau (CFPB) will begin looking into complaints about prepaid cards, the agency announced Monday.

“Today we are taking another important step to expand the bureau’s handling of consumer complaints,” CFPB Director Richard Cordray said in a statement. “By accepting consumer complaints about prepaid products and certain other services, we will be giving people a greater voice in these markets and a place to turn to when they encounter problems.”

The CFPB already investigates complaints about traditional credit cards, mortgages, auto loans, student loans, bank accounts, credit reporting, debt collection, and payday loans.

Now, the CFPB will also expand its reach to prepaid cards, which could include gift cards, employee benefits cards for healthcare and transit payments, and general purpose reloadable cards.

These prepaid cards allow consumers to access cash that has been loaded on the cards upfront.

“Some prepaid cards, however, have fewer consumer protections than debit or credit cards,” the CFPB said, which can leave consumers vulnerable to fraud and bad business practices. 

The CFPB will give companies 15 days to respond to complaints about the prepaid cards they issue, and resolve any problems within 60 days.