Author: Michelle Singletary / Source: Washington Post
If you use a prepaid card — and millions of you do — take heed, because there’s an effort in Congress to block new rules that would give you the kind of federal protections afforded to debit and credit card users.
General-purpose prepaid cards are increasingly being used to make purchases, pay bills and get cash at ATMs. Government agencies and employers use the cards to directly deposit benefits or paychecks.
So the Consumer Financial Protection Bureau issued comprehensive rules to guarantee that prepaid cards come with a simple fee chart or give cardholders basic fraud protection.
Here are some specifics of the rules that, if not overturned, will go into effect in October:
●Unauthorized charges are limited to just $50.
●Financial institutions must investigate unauthorized or fraudulent charges. If fraud is found, the cardholder’s funds must be restored.
●Cardholders get free and easy access to account information. Unless financial institutions send customers a periodic statement, they can’t charge for access to account information by telephone, online or in writing.
●Fee information has to be upfront and clearer. Prepaid cards can come with numerous fees including for reloading the card with cash, making purchases, checking a balance, withdrawing money from an ATM — or for not using it enough.
●Companies must make sure that people can afford credit linked to the prepaid card. Consumers also get at least 21 days to repay the credit debt before they are charged a late fee.
Here’s why the new rules really matter and why you need to tell your representatives in Congress to stop this nonsense about lifting all these regulations.
Prepaid cards have become the go-to financial product for people who don’t have a banking relationship. About half of households that used the cards in 2015 were either unbanked or underbanked, according…
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