Thursday, February 6, 2014
New bill designed to protect prepaid cardholders
Barely had the new year rolled around than new legislation targeting the prepaid card industry was introduced in Congress. On Jan. 9, 2014, Sen. Mark Warner, D-Va., proposed a bill that mandates detailed fee disclosures accompany prepaid card programs.
The Prepaid Card Disclosure Act of 2014, S. 1903, would direct the Consumer Financial Protection Bureau to set standard disclosure guidelines in regard to prepaid card fees, including how the fee information is presented and how frees are described. The bill would allow disclosures to be accessed by consumers via the scanning of quick response codes (or standard barcodes) with smartphones. Toll-free customer service numbers are also mandated.
The bill exempts certain types of prepaid, including open-loop, network-branded gift cards (that contain value below $250) and closed-loop, store-specific gift cards. among others. S. 1903 is similar to the Prepaid Card Consumer Protection Act of 2013, S. 1867, which was introduced by Sen. Robert Menendez, D-N.J., on Dec. 20, 2013.
Warner, who is the ranking member of the Senate Banking Committee, said, "Greater transparency of fees in a consistent way will empower consumers to make more informed decisions before purchasing or using one of these prepaid products."
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