Popular prepaid debit cards have drawbacks

Tens of millions of people have prepaid debit cards in their wallets, and experts say it’s possible more people will do so in the future.

However, when some card users encountered customer service issues, they turned to Contact 6 for help.

If you walk into many retailers in Southeastern Wisconsin, you will likely find a display of cards. Many of these cards are prepaid debit cards, and one of the most popular is Green Dot.

Green Dot cards are issued by Green Dot Bank, which is a “branchless bank” with over 90,000 retail outlets nationwide. Green Dot offers a variety of FDIC insured banking products.

Prepaid debit cards allow “bankless” – that is, people without a traditional bank account – to make purchases in a world increasingly dependent on electronic payments. The card holder can load money onto the card at a point of sale and the card is accepted almost universally.

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Judy Radtke wrote to Contact 6 after her prepaid card was frozen over fraud concerns, and she was unable to access a Social Security payment deposited on the card. She had called customer service but was getting no results.

“I was very discouraged, very angry when they didn’t want to go any further,” Radtke said.

After Contact 6 sent an email on behalf of Radtke, Radtke said Green Dot returned his money to the Social Security Administration. She says the payment was reissued to her new bank account.

A spokesperson for Green Dot told Contact 6, “For the sake of privacy and customer protection, we do not share details related to individual cases or incidents. I can, however, confirm that we have been in contact with the client and referred her to Social Security for resolution. “

Five people wrote to Contact 6 this year about customer service issues with prepaid cards.

A woman wrote that she couldn’t access a stimulus payment deposited on her prepaid card. She said her issue was resolved after Contact 6 contacted on her behalf.

Brenda Campbell, President and CEO of Secure Futures, said prepaid cards are convenient and easy to obtain.

“You’re at the grocery store, you’re at the drugstore or the big box store, they’re just at the checkout,” Campbell said.

Brenda Campbell

There is no credit check to get a prepaid card. There is no long application and no risk of credit card debt. Cards are useful for anyone who sticks to a strict budget.

Green Dot cards are designed to meet the needs of low to moderate income people living paycheck to paycheck who might benefit from a secure card for purchases.

However, some viewers told Contact 6 that they encountered issues when trying to access customer service.

“This is where we hear about all the problems people have in getting an answer,” Campbell said.

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If a consumer has a problem with a bank’s debit card, they can simply go to the nearest bank branch and ask for help. However, if they have a problem with a prepaid debit card, there is no physical location they can visit to look for a solution. In many cases, their only option is to contact customer service by phone or computer.

“It may take a while and if you need this money quickly, it will be very difficult to do it,” said Dr. Kent Belasco, director of the commercial banking program at Marquette University.

Belasco said the further the company moves away from cash, the more people who depend on cash may need prepaid cards.

“This is a group that needs to gain a foothold in the banking world,” Belasco said.

Dr Kent Belasco

Green Dot has chat, phone and email customer service.

A viewer wrote to Contact 6 that she called “several times a day to get only different responses.” She claims to have been the victim of fraud and, so far, has recovered half of her money.

“If you depend on what’s on that card it can be very difficult,” Belasco said.

In response to customer service complaints, a spokesperson for Green Dot told Contact 6:

“We are committed to serving, supporting and protecting our customers and their accounts in these unprecedented times. This includes increased investments in the overall customer experience, including improved support channels, communications, training and personnel, fraud protection and prevention, and more. This has been an ongoing process and a priority for over a year, since our new CEO took office in early 2020 … we take these matters seriously and are committed to providing the access and support that customers need. “

The spokesperson also stressed “the importance of (card users) understanding our products and how they work, and taking appropriate steps to protect accounts and personal information.”

If you use a prepaid card, never share your card number or PIN, as cards are the target of scammers. Read the fine print, especially regarding additional charges. In addition, keep your receipts in case of problems.

For tips and tools to help protect client accounts from scammers, visit go2bank.com.

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