CFPB Monthly Consumer Snapshot Highlights Complaints Related to Prepaid Products

CFPB Prepaid Cards Consumer Complaints

On March 1, the CFPB released its most recent complaint report focusing on prepaid products. According to the report, as of February 1, 2016, consumers have submitted approximately 4,300 complaints specific to prepaid products. Findings related to prepaid products highlighted in the report include: (i) consumers are not able to access funds loaded to prepaid cards for extended periods of time; (ii) companies are refusing to re-issue cards with remaining balances to consumers before the originally issued card expires; (iii) consumers are facing various extra charges, such as replacement, monthly, inactivity, and PIN number change fees; and (iv) companies are freezing entire balances when a consumer files a claim to dispute an unexpected charge, making funds unavailable until the claim process is complete. The report also notes that “[c]onsumers who were victims of frauds or scams frequently complained that scammers instructed them to purchase prepaid cards in order to transfer funds to the fraud perpetrators.” 

In addition to its focus on prepaid product based complaints, the report identifies the Houston, Texas metropolitan area as its geographical spotlight, noting that as of February 1, 2016, the CFPB has received approximately 63,200 industry-wide complaints from Texas consumers, with about 15,700 coming from Houston consumers alone. A review of the Texas complaints resulted in a highlight of the most-complained-about companies and the most-complained-about consumer financial products and services. Debt collection, mortgage, and credit reporting accounted for the top three most-complained about products in both the Texas sampling and for all consumer complaints submitted to the CFPB’s Consumer Complaint Database.