Tuesday, January 29, 2013

Prepaid Card Reforms: A Focus on UDAAP Risks

The Attorney General of Florida, Pam Bondi, recently announced settlements with five of the largest prepaid companies operating in the state. The settlements follow an investigation that the companies misled consumers on fees, as well as claims that the prepaid cards would improve their credit histories.

According to a statement from Bondi, “The reforms we are requiring will protect consumers by providing them with the information they need in order to make sound financial decisions, and they establish standard business practices among Florida’s largest prepaid debit card companies.” The settlement also includes a payment of $115,000 to the Central Florida Chapter of Junior Achievement.

While this news is not as brutal as the announcements of settlements over the summer, the legal community is bracing for more such news. With interpretation of UDAAP-related statutes often open-ended and murky, now is the time to protect your firm from risk and compliance issues coming up in 2013.

At Prepaid Expo this March, you’ll hear from Martin Bishop, Chair of Consumer Financial Services Practice and Vice Chair of Litigation Department at Foley & Lardner LLP. In this interactive UDAAP-focused session, you’ll dive into analysis of the statute, as well as tackle hypothetical situations to diagnose your readiness to handle compliance.

Prepaid Expo 2013

What do you think this settlement means for the prepaid industry as a whole? Is this a blip on the radar – or do companies need to join together as an industry to clarify these regulatory mandates?

Read the full article here.  


Ryan Geswell is a New Media Analyst in the Finance Division at IIR USA with a background in Marketing and Media. He can be reached at rgeswell@iirusa.com.

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