Preoccupied Cardholders Fighting for Enhanced Protection
- US consumers are turning to the Consumer Financial Protection Bureau to try and fight for improved prepaid card accounts guaranties and protection measures.
- They require that the term “account” be clarified under Regulation E and that prepaid accounts be expressly specified as part of this Regulation. They deem this precision necessary to their protection to comply with the Electronic Fund Transfer Act.
- The current popularity of prepaid cards results from an overall increase in account maintenance-related charges. Nevertheless, these cards do not ensure the same level of protection as their traditional counterparts and can induce hidden fees. Consumers then wish to benefit from the same measures as when using other, conventional, debit cards.
- Among their requests:
- A cap applicable to the funds lost in case of theft or abusive use of their card,
- The assurance to have the lost amounts recredited within ten business days after report,
- A detailed list of card use-related fees before signing up the contract,
- A statement or other forms of transaction information,
- And, no overdraft fees for all prepaid cards.
- It should be reminded that Regulation E sets a framework for customers rights and liabilities regarding the use of ATMs and POS terminals, bill payments as well as transfers to or from their account. The term Electronic Fund Transfer (EFT) generally encompasses all transactions initiated through POS devices, by phone, using a computer, etc. and instructing credit or debit operations from the customer’s account.
- Fraud figures are actually accounting for their fears. According to the recent Nilson Report on card fraud, the US is particularly affected and has caused 47% of the global credit and debit card fraud losses worldwide. Payment card-related fraud cases totalled 3.56 billion dollars in 2010. Delays in the implementation of the EMV standard partly account for these figures.