New Rule Provides Fraud Protection With Prepaid Cards

PHILADELPHIA – Alvin Prasad says someone fraudulently drained his prepaid debit card, leaving him without the means to pay his rent.

“I felt sick to my stomach,” he said. “I’m going to get kicked out. I’m going to need a new place to live.”

Prasad said when he called his prepaid debit card company they told him there was not much they could do to resolve the matter.

“I had no idea what to do; I’ve never been in a situation like this,” he said.

Prepaid debit cards, used by 23-million Americans per The Pew Charitable Trusts, do not have the same protections as debit cards connected with banks.

But a new rule from the Consumer Protection Offices will “extend a lot of the same coverage that you see with credit cards (and) debit cards,” Matt Schulz of CreditCards.com said.

The new rules would force financial institutions to investigate fraudulent claims tied to prepaid cards.

In addition, the money will generally be protected if the card is lost, stolen or wrongly charged.

The new rules do not take effect until April 2018 but Prasad’s prepaid debit card company did return his money.


via 215Today.

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