Another $10M Mailed in FTC NetSpend Prepaid Cards Settlement

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The Federal Trade Commission just announced that it will send out another $10 million to consumers from a NetSpend prepaid cards settlement.

In April 2017, the agency announced a $53 million settlement over allegations that NetSpend Corporation delayed customers’ access to funds placed on NetSpend prepaid debit cards.

The additional $10 million comes from refund fees collected by NetSpend debit cards that were not paid out during the consumer redress period, according to the FTC statement.

The FTC says that only consumers who did not receive checks from the first FTC NetSpend prepaid cards settlement will receive a payout from the additional $10 million.

According to the agency announcement, more than 430,000 checks will be sent to consumers.

Those who receive checks in the FTC NetSpend prepaid cards settlement should cash or deposit them within 60 days.

FTC NetSpend Settlement

According to the FTC, NetSpend falsely advertised to consumers that funds would be instantly accessible on the cards, but consumers complained of delays spanning several weeks.

NetSpend also allegedly denied or delayed the activation of debit cards with money already on them.

According to the FTC, some of the consumers who were either denied access to their money or who did not receive their refund from the company after closing their accounts faced severe financial hardship.

Consumers alleged that they were forced to miss bill payments and even faced eviction because they could not access money they had used to fund their NetSpend debit cards.

According to the FTC, those who do not have bank accounts often rely on prepaid cards. The agency initiated an enforcement action against NetSpend because of representations made by the company about immediate access and guaranteed approval for the prepaid cards.

NetSpend allegedly told consumers that they would receive temporary credits for pending transactions while their account was initially funded and processed.

However, consumers complained that NetSpend failed to issue the temporary credits before the transactions went through.

Further, consumers alleged that their NetSpend applications were denied, but the company failed to refund the money they attempted to put on the card during the application process.

Those eligible for the FTC NetSpend prepaid cards settlement include consumers with accounts created between Jan. 1, 2010 and Aug. 31, 2016. The NetSpend accounts must have been funded and must not been activated by Aug. 31, 2016. Excluded accounts also include those subject to fraud, a full refund or credit, return of funds, or similar reasons.

The deadline to file a claim in the original FTC NetSpend prepaid cards settlement was Oct. 7, 2017.

Consumers with questions about the FTC NetSpend prepaid cards settlement or the FTC refunds program in general can access additional information on the FTC refunds website.

The FTC NetSpend prepaid cards settlement also prohibits NetSpend from falsely advertising or misrepresenting the cards to consumers, specifically about access to funds.

The FTC is represented by Mark Glassman, Adam M. Wesolowski, and Robin L. Rock of the Federal Trade Commission.

The FTC NetSpend Prepaid Cards Lawsuit is Federal Trade Commission v. NetSpend Corp., Case No. 1:16-cv-04203-AT, in the U.S. District Court for the Northern District of Georgia.