Green Dot Walmart Outage Cost More Than $4.4 Million, Impacted 58,500 Customers
A series of technical glitches during Green Dot Corp.’s processing conversion to MasterCard Payment Transaction Services (MPTS) for Walmart’s MoneyCard in May set Green Dot and Mastercard back more than $4.4 million, which includes letting customers keep money that was incorrectly credited to them.
That dollar figure and many more details from the tech problem—which hit about 58,500 customers with the inability to check account balances, activate their cards or have legitimate transactions approved—have come to light courtesy of letters company officials sent to a pair of U.S. senators.
Letters from Green Dot, MPTS and Walmart were sent to Sen. Sherrod Brown (D-Ohio) and Sen. Bob Menendez (D-N.J.) in response to demands made last June for answers about the service outage.
During the service disruption, 41,385 customers experienced a declined transaction due to their account showing an incorrectly low balance, according to the letter by Steve Streit, Green Dot CEO. The cause of the incorrect balances could have been caused by a double posting of a debit to customers’ accounts, incorrect posting of a credit to their accounts or other similar processor error impacting the accuracy of the account balances, according to the Green Dot letter. Nearly 12,600 customers couldn’t activate a new or replacement card. The company said it also received an additional 4,500 complaints through online and social media, or from other organizations such as the Better Business Bureau, which was included in the total of customers affected, though, in many cases, Green Dot couldn’t identify an actual problem having occurred. The technology issues affected approximately 1.2 percent of customer accounts—as of March 31, Green Dot had nearly 4.8 million total active cardholders. Both Green Dot and Mastercard wrote that, with very few exceptions, customer deposits, including payroll and government benefit direct deposits, correctly posted to customer accounts during the disruption.
To compensate cardholders, Green Dot waived the monthly account service fee for affected customers for two months and deposited a courtesy credit of $50 to each account in the group of 58,500-plus accounts. Some customers received greater amounts to their account as compensation for specific errors that might have caused the customer to incur a late fee from a third part or some other type of customer impact resulting from the service disruption, according to Green Dot. Also, although a group of customers had lower than accurate balances, nearly 6,000 customers had an incorrect, but higher, balance and they were allowed to keep those funds. In total, Green Dot credited more than $4.4 million to customer accounts. Mastercard helped offset some of the compensation to consumers, according to the network.
Walmart’s letter simply provided a general overview of what happened May 16-20, including its ongoing communications with Green Dot during the service interruption. The retailer also noted that Green Dot is the issuer of the MoneyCard, and that the cardholder agreement is between Green Dot and the cardholder. Walmart acts as the agent of Green Dot in performing activities with respect to the MoneyCard, such as MoneyCard reloads, and that MoneyCard customers are directed to contact Green Dot with any account issues.