Senators Want Answers on Prepaid Outages
U.S. Sens. Sherrod Brown (D-Ohio) and Bob Menendez (D-N.J.) are demanding answers from Green Dot, MasterCard and Walmart about a May outage that left Green Dot-issued Walmart MoneyCard customers without access to certain prepaid services.
The two legislators have sent a letter addressed to company executives at Green Dot and Walmart, as well as a letter to MasterCard asking for an explanation of the problems experienced, steps the companies are taking to prevent future issues, how many consumers in their states were affected and whether consumers will receive any reimbursement.
Last month, Green Dot announced several technical glitches during its processing conversion to MasterCard Payment Transaction Services. Some customers were unable to check account balances, activate their cards or had their transactions declined.
Given a deadline of July 31, 2016, the companies also must explain to the senators how consumers who use Green Dot cards for payroll deposits were affected, how Walmart and Green Dot handle consumer complaints about prepaid cards, to what extent the CFPB was informed about the service disruption, and details regarding Green Dot’s promise to put “extra money” on cards, among other information. The letter mentions the Walmart MoneyCard’s arbitration clause and the senators are asking how this will affect consumers in seeking compensation.
Sens. Brown and Menendez asked MasterCard many of the same questions; however, they also wanted MasterCard executives to distinguish the circumstances between the Green Dot outage and the one RushCard experienced October 2015. MasterCard also is the processor for RushCard. Even though the letter is dated June 28, MasterCard has a deadline of June 30, 2016, to reply.
MasterCard tells Paybefore it has received the letter from the senators and will be responding to them shortly. The payments network also noted that “the slowdown last month affected a limited number of cardholders. We caught it right away and worked closely with Green Dot to address the issues and support their customers.”
Last fall RushCard customers were affected by technical problems when the company was changing processors. Since then, UniRush LLC, the company behind Russell Simmons’ RushCard, agreed to settle a class-action lawsuit by paying up to $19 million plus $1.5 million for legal fees.
In both letters, the legislators said they “are encouraged that the CFPB proposed rules to regulate prepaid cards in order to ensure fair dealing in this market.”