When the United States government gets involved in a class action settlement, you know the legal issues have far reaching implications. Such is the case with the recently approved $53 million settlement the United States Federal Trade Commission (FTC) reached with NetSpend Corporation. The approved settlement provides compensation to consumers negatively impacted by the mishandling of NetSpend prepaid debit card funds.
The FTC has accused NetSpend of practicing deception when it came to communicating with consumers about the availability of money deposited in prepaid debit card accounts set up and maintained by NetSpend. In court documents, NetSpend promoted the reloadable prepaid debit cards as a convenient way to access and transfer money.
However, the FTC claims NetSpend customers could not gain access to funds as promised under the prepaid debit card agreements. NetSpend either delayed activation of the prepaid debit cards or prevented customers from using the cards. Customers assert they did not receive refunds for several weeks after closing NetSpend accounts. For many customers, the delay in receiving money caused “severe financial hardships that encompassed evictions, repossessions, and large late fee charges.”
What You Need to Know
In addition to cash payments, the settlement also prevents NetSpend from making fraudulent claims about the availability of customer money deposited in prepaid debit card accounts. The class action settlement www.ftc.gov/enforcement/cases-proceedings/refunds/netspend-refunds says NetSpend prepaid debit card accounts covered by the settlement include “accounts acquired by consumers between January 1, 2010 and August 31, 2016 that: (1) were not activated by August 31, 2016; (2) were loaded with funds; and (3) are not excluded by reason of fraud, prior full refund or credit, return of funds to payment source, escheatment of funds, or similar reason agreed upon by the parties.” The potential award varies depending on how much account holders deposited in NetSpend accounts.
Eligible class members are encouraged to submit information in the notice of settlement sent by email and/or snail mail. As of May 8, 2017, a claim form has not been uploaded to the class action settlement website for the case. NetSpend plans to send notices to eligible class members, which for now is how class members file a claim. Eligible class members who did not receive a NetSpend notice should contact the class action settlement website or the FTC at [email protected]. NetSpend has 180 days from the settlement order to contact eligible class members.
Federal Trade Commission v. NetSpend Corp., Case No. 1:16-cv-04203-AT, in the U.S. District Court for the Northern District of Georgia has not posted a final hearing date. Class counsel attorneys Mark Glassman, Adam M. Wesolowski, and Robin L. Rock represent the Federal Trade Commission in the NetSpend class action lawsuit settlement.
