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.

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.  




 ABOUT THE AUTHOR

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.

Share this article with your social network, just click below to share now!

Share |

Welcome to the 25 prepaid facts blog series

 I'm Lovin It' — HM1(FMF) Fred Turner swipes his gift card in McDonald's new card machine, April 4. The new machine now allows customers to use debit, credit or gift cards to purchase food. (Photo: Wikipedia)

For the next several weeks, there will be a series of informative blog posts on the fascinating but evolving world of prepaid cards. Each post written will be an extension of a previous blog post: The “25 intriguing thingsyou should know about prepaid cards” post offered insightful information pertaining to the growing usage of prepaid cards. In the post, the facts included the abundance amount of money being filled on the prepaid cards, the high volume usage between the different incomes and the new way to pay for items.

With this new series, I will be able to go a little deeper into those fun facts and  offer some insights. The topics will be filled with variety with the hope that they will cause you to think about our changing world. The posts will make you wonder what it would be like if cash was virtually nonexistent (like the penny). Others will make you think how it would to interact with one another only using your debt or credit card. By interaction, I mean the idea of owing someone money and cash is not available, you may use your card. And imagine that only your phone would be used when purchasing items. These are just a few teasers for what is to come.

Prepaid is an ever expanding industry and the ideas mentioned before could be very possible for in the next few years to come. Granted, the extinction of cash is highly unlikely to happen in our lifetime (or is it?), however, stores using only gift cards and meters allowing people to use their cards instead of putting coins are already a reality. Most people now only carry their cards; they simply do not carry cash on them, they rather just use their card. Soon we all will wake up one day and things that seem so abstract to most people will become reality.

And, this is what the series will be about. So over the next few weeks I invite you, the reader, to be intrigued by the posts provided and imagine the way the world will be changing and the way the prepaid cards space is converging with other industries..

About the Author


Adam Wells studies English at Pace University and can be reached at AWells@IIRUSA.com. 

Share this article with your social network, just click below to share now!

Share |