Customers reported problems gaining access to their funds, swamping the company’s telephone service center and website.Īs the trouble persisted throughout last week, frustrated customers turned to Twitter and Facebook to air their grievances. RushCard’s problems started over the Columbus Day weekend, when it switched from one processing technology provider to another. Final rules could be released early next year, with full adoption by the industry several months after that. Nearly a year ago, to close those gaps, the bureau proposed federal consumer protections limiting loss of customer funds when cards are stolen or lost, easier access to account information, broader fee disclosures and credit protections. They are forced to turn to prepaid cards because they lack the standing to get a credit card or are unable or unwilling to open a traditional bank account. Nearly a quarter of these cardholders earn less than $15,000 a year. In 2012, the most recent year available, prepaid cards held $65 billion, more than double the amount from just three years earlier, according to a survey by the Pew Charitable Trusts. Still, he noted, “the market is making progress, and prepaid cards are evolving away from ‘gotcha’ fees to enable more people to get access to the banking system.” “Prepaid cards have a good, bad and ugly to them,” said Joe Valenti, director of consumer finance at the Center for American Progress. Seeing an opportunity, a number of financial card companies and lenders have rushed in to serve the so-called underbanked and unbanked. Banks, seeking to reduce their regulatory burden after the financial crisis, have shed lower-income customers.
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