Do you use prepaid money cards? You have 5 new rights
Prepaid money cards now have similar protections regarding fraudulent and unauthorized charges as debit and credit cards. The Consumer Financial Protection Bureau (CFPB) developed the new prepaid accounts rule to protect consumers from becoming victims to hidden fees, fraud, and who are overburdened with excessive overdraft fees. Prepaid payroll cards, used for direct deposited paychecks, are also protected under the new prepaid accounts rule. How are prepaid cards now protected?
- Prepaid cards are now protected against fraud and unauthorized charges. When using a prepaid card, you should inquire information about how you can report fraudulent charges to the prepaid card company. Also, you should ask about your liability rights when it comes to fake charges.To learn more about what liability is, please click here to read about liability rights for debit and credit cards on our website.
- No more hidden fees. You should receive information about your rights with prepaid cards regarding the Electronic Funds Transfer Act (EFTA) and the Truth In Lending Act (TILA) before activating the prepaid account.This information is to prevent consumers from being a victim of hidden fees. To learn more about hidden fees, please read our articleAre you a victim of hidden fees? You can also learn more about your rights TILA rights by reading our article Truth in Lending Act.
- Free access to view transaction history and balances.
- Businesses who pay employees through prepaid cards must inform their employees about any additional fees.
- There are now restrictions that apply to hybrid credit-prepaid cards when it comes to overdrafts fees. You are now allowed a 30-day trial period to try out hybrid cards before signing up for overdraft services.
Why does one choose to use a prepaid card?
People often choose to use prepaid cards when they cannot get approved for a bank issued card, or because they lost their bank account due to over drafting too much. It is harder for consumers using prepaid cards to overdraft an account because many prepaid cards will not make a transaction unless there is enough money in the account to cover the cost of the transaction. Hybrid credit-prepaid cards will typically allow users to overdraft the account for an overdraft fee. Some businesses also choose pay their employees through prepaid payroll cards.
The lawyers at Doucet & Associates have experience fighting for consumer rights when the Electronic Funds Transfer Act or the Truth In Lending Act have been violated by a bank or business. Check out our Debit and Credit Cards page to find more information. You can also call us at (614)944-5129 or send us a message online if you have any questions about your rights and the EFTA and the TILA.