Prepaid cards have really been making the headlines lately.
They became banking’s next big thing so fast that the Consumer Financial Protection Bureau (CFPB) hasn’t even regulated them that much.
But that’s all about to change, as the CFPB announced on Wednesday.
Though prepaid cards have become a go-to for consumers looking for an escape from traditional checking accounts, they don’t offer the same amount of transparency as a credit card—and are known to slap consumers with expensive, but well-hidden fees.
To put an end to such deceptive practices, the CFPB plans to evaluate several key aspects of the prepaid card industry. Two of the more important categories are:
1. Fees and Terms disclosure: The prepaid card industry doesn’t have any standard way of disclosing their terms and fees, which makes it virtually impossible for consumers to comparison shop.
2. unauthorised Transactions: For years, consumers haven’t been fully liable when fraudulent activities have occurred on their accounts, but prepaid customers don’t exactly enjoy this same luxury.
While the Bureau sorts through everything, it’s put out a helpful primer for consumers on its site to answer questions. Check out their new prepaid cards section on Ask CFPB.
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