Walmart MoneyCard Class Action Filed After Service Disruption

An angry Walmart MoneyCard holder filed a class action lawsuit against Green Dot Corp. and MasterCard Inc. after a three-day disruption in service cut off access to her funds.

Plaintiff Kathleen Crook claims that the outage, which started May 17, was related to a card system update.

She says the MoneyCard outage caused her significant hardship because she was unable to pay her rent on time or purchase food.

The Walmart MoneyCard is a pre-paid debit card that is issued and serviced by Green Dot Corporation and Green Dot Bank. According to the MoneyCard class action lawsuit, many MoneyCard holders do not have traditional bank accounts. Many employers reportedly deposit their employees’ wages directly to a MoneyCard.

According to the class action lawsuit, MoneyCard account holders were notified that there would be a temporary service disruption beginning on May 14, 2016. The disruption was predicted to last about 12 hours. The service disruption was reportedly necessary to transition to MasterCard Payment Transactions Services, at which point MasterCard would process all of the MoneyCard transactions.

“MoneyCard services were frozen and unavailable, not merely for 12 hours, but for several days in May 2016,” Crook alleges in the class action lawsuit. “During this time the holders of MoneyCard accounts could not spend, withdraw, or otherwise access the funds in their accounts.”

Due to this disruption, many MoneyCard account holders faced substantial hardship because they were unable to pay for essential goods and services, the MoneyCard class action lawsuit asserts.

Crook claims that this MoneyCard service disruption was illegal. “It prevented Plaintiff and other account holders from spending or withdrawing funds in their MoneyCard accounts for several days—denying access to many consumers’ only source of money,” the MoneyCard class action lawsuit alleges.

According to the class action lawsuit, Crook’s employer deposits her wages directly to her MoneyCard. Crook says she misplaced her MoneyCard on approximately May 17, and contacted Walmart for a replacement. A Walmart representative reportedly told her that the MoneyCard system was undergoing updates and that she could not order a new card. As a result, she was unable to access her funds during this time.

The MoneyCard class action lawsuit also claims that an arbitration agreement contained in the MoneyCard Cardholder Agreement is unenforceable because Green Dot possesses superior bargaining power over the account holders. Crook alleges that the arbitration clause is “contrary to public policy and unenforceable” because a significant number of consumers have no other options and must rely on MoneyCard services for their basic needs.

Crook seeks to represent a Class of everyone in the United States who held a Walmart MoneyCard as of May 14, 2016. The MoneyCard class action lawsuit asserts claims for breach of bailment contract, conversion, negligence, violations of the Unfair Competition Law, and unjust enrichment.

Crook is represented by Daniel C. Girard, Jordan Elias and Scott M. Grzenczyk of Girard Gibbs LLP.

The Walmart MoneyCard Outage Class Action Lawsuit is Kathleen Crook v. Green Dot Corporation, et al., Case No. 2:16-cv-04172, in the U.S. District Court for the Central District of California.

UPDATE: On Dec. 5, 2016, Green Dot and MasterCard entered into a settlement agreement with a group of Walmart MoneyCard holders who were unable to access their funds during a longer than anticipated disruption in service last May.

UPDATE 2: The Green Dot MoneyCard service disruption class action settlement is now open. Click here to file a claim.