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Buyer Beware: Green Dot Prepaid Debit Cards

Oct. 31, 2018
Personal Finance
Buyer Beware: Green Dot Prepaid Debit Cards

Looking for a prepaid debit card? Watch out for Green Dot Corp., whose cards are among the most popular.

A NerdWallet investigation found that consumers complained to the government’s primary consumer watchdog agency about Green Dot more than 1,500 times, placing the prepaid card issuer in the top 2% of companies the regulator hears about.

Customers have told state and federal regulators that when they dispute a transaction, Green Dot freezes their accounts for days or even weeks, cutting them off from money they need for day-to-day expenses.

Mary Drummer says she complained to Green Dot after noticing more than $4,200 of unauthorized charges on her prepaid Walmart MoneyCard, issued by Green Dot.

Company representatives told her she could not access any of her money until they investigated, which might take at least two weeks, Drummer said in a complaint filed with the Ohio attorney general in 2014.

“The money on that card was the ONLY income I have,” she wrote. “I absolutely cannot wait almost 2 weeks to receive my money.”

Hundreds of hidden disputes

NerdWallet found that California-based Green Dot Corp. is the subject of at least 1,580 complaints filed with the federal Consumer Financial Protection Bureau.

Yet nearly all of those complaints are absent from the bureau’s public complaint portal, which the agency created for consumers to research the integrity and reputation of companies. A quirk in the bureau’s rules, which exempts Green Dot from regulation, keeps complaints against the company largely out of public view.

» MORE: Financial companies rack up complaints, but good luck finding them

NerdWallet obtained the complaints by filing a Freedom of Information Act request with the CFPB.

In an email to NerdWallet, Green Dot said it may block customers’ cards and mail them a replacement if they report unauthorized charges. It says it credited Drummer’s account within 10 days of her complaint.

The company said it strives for 100% customer satisfaction and responds promptly to all complaints, resolving most within 24 hours.

Green Dot describes itself as one of the country’s most widely distributed banking franchises. It issues prepaid cards for Walmart and other retailers, handles transactions for Apple Pay Cash, and has a partnership with Intuit’s TurboTax and 25,000 other tax preparers.

The company said customers loaded more than $21 billion onto its products during the first half of this year, a 40% jump from the same period in 2017.

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