NetSpend Corporation

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Additional Complaint Information

BBB has received consumer inquiries regarding unsolicited mailings received from NetSpend. Consumers claim that they have received what appears to be a debit card with their name on it. Consumers have expressed concern that they did not apply for a card and that these cards could be misused. BBB contacted NetSpend to get clarification on these concerns.  In response, NetSpend states that the card is meant as an offer only, and cannot be used by anyone prior to activation. Cards cannot be activated unless a customer meets the federally mandated Customer Identification Process requirements for NetSpend to validate the consumer's identity. NetSpend further states that they have no personal information beyond a consumer's name and address, and possibly their email address until a consumer activates the card.  NetSpend states that they send the personalized, embossed cards to consumers based on information received from one of two sources.1. Consumers may "opt-in" for the offer while on another company's website, or 2. NetSpend may receive consumer information from another company who believes their customers may benefit from NetSpend's products and services.  NetSpend requests consumers notify them if they are not interested in this offer, and if they would like to be removed from NetSpend's list for future marketing offers. NetSpend advises consumers to destroy the card if they are uninterested in the offer.

Some BBB complainants have cited concerns with delays in investigating fraud or refund issues.  Complainants also have cited concerns with accounts being locked or deposits not processing in a timely manner. NetSpend has addressed this issue by providing the folllowing information: NetSpend prepaid cards are bank-issued products and thus error resolution and billing dispute procedures are governed by the provisions of Regulations E(12 CFR 205 - Electronic Fund Transfers).  In addition, fraud investigations are subject to the policies of the card associations (i.e. Visa and Mastercard) to which the banks belong.  These provisions afford protections to the consumer and at the same time mandate time frames under which disputes, investigations and provisional credits to an account must be processed.  Additionally NetSpend must, according to industry and reulatory requirements, verify the match of funds being deposited.  NetSpend has three business days to verify the identity of the cardholder.  If the identifying information is not provided, the deposit must be returned to the sender.  NetSpend  makes multiple attempts to contact the cardholder during this period for verification.

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• Government Actions

  L11-03-1040
  Date of Action: 10/2/2012
  In October 2012 the State of Florida Office of the Attorney General and NetSpend entered into an assurance of voluntary compliance.  Without any admission of wrongdoing, guilt, violation of law or findings of fact NetSpend agreed to resolve the matter by agreeing to but not limited to the following:
  *Continue to comply with all applicable federal and Florida Laws, including but not limited to all laws and rules relating to the Clear and Conspicuous disclosure of Material fees, and other Material terms and conditions.
  *within the limits of the authority granted to it by the issuing banks, shall Clearly and Conspicuously disclose, on its Card Packaging materials, all Material fees associated with the Prepaid Debit Cards or Prepaid Debit Card Services, and advise the consumers where information about any other applicable fees may be found.
  
  Notwithstanding its willingness to enter into this Agreement and bind itself to the terms and conditions provided herein, Respondent denies any wrongdoing or liability of any kind whatsoever arising from the distribution, marketing, servicing and/or promotion of Prepaid Debit Cards during the Relevant Period.
  
  The full details of this agreement can be found online by clicking the case number above. 
  

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• Advertising Review

  BBB has nothing to report concerning NetSpend Corporation's advertising at this time.

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