FTC Files Complaint against NetSpend for Misleading Ads
The Federal Trade Commission has filed a complaint against NetSpend through the United States District Court in northern Georgia for false advertising. NetSpend has multiple ads in place promoting immediate access to funds deposited into their prepaid card accounts, but many consumers have had to wait days, or even weeks, before seeing their money on their cards.
It is possible to load money onto a NetSpend card right away through a retailer, but that does not mean that the funds are actually available for use. In order to activate their cards, users must give NetSpend personal information such as their name, address, and Social Security number. Some customers have to send this information in multiple times before receiving an activated card. During this time, their money is tied up in an account they cannot access.
Another element of the complaint revolves around NetSpend’s error resolution process. The company claims to investigate and resolve nearly all complaints within 10 business days, unless the account has been open for less than 30 days. The FTC says that “NetSpend often is slow to resolve account errors, and fails to provide or significantly delays providing provisional credits for account errors.”
The FTC also claims that NetSpend has blocked access to accounts after customers have activated and used their cards. Even when those customers contact the company to undo the block, some had to go without their funds for months before the card was re-opened.
The complaint does not request a specific amount of reimbursement or fees, but rather requests whatever the “Court finds necessary to redress injury consumers,” along with actions to prevent future violations and protect consumers from the current advertising discrepancies.