The recent subpoenas by the Florida Attorney general to major prepaid cardproviders again highlight the need for transparency in theprepaid card industry. The concern for the Florida AttorneyGeneral, and for a number of other prepaid industry watchers, iswhether or not consumers are being charged so-called ‘hidden’ feeson their cards.
The industry must strike a delicate balance when answering thesecharges, because most companies offer clear disclosure for theircards. However, they must always be alert for any place whereconsumers might become confused or where something might get buriedin the extensive language of a terms and conditions document. If acompany gets a lot of calls and complaints about a particular fee,at the minimum, it needs to address the disclosure of that fee, andat the maximum needs to consider eliminating it all together.
That said, these companies cannot be held accountable for consumerswho do not read the terms and conditions or who do not payattention to the ways in which they use the cards. There is aninstinct to protect the consumer on the part of government, but itis akin to speed limits. The speed limit is clearly disclosed, butthat doesn’t mean that consumers won’t exceed it. (Though consumersdon’t always know in advance how much they will pay in fees fordoing so.)
Prepaid card companies also need to be transparent at a high level.They need to be able to disclose to the government and the mediahow important their industry is by showing its size and diversity.Once it becomes clear that there are millions of cards in use thatare not leading to unfair charges against consumers, and thosecards are put to uses ranging from delivering food stamps to payingwages to helping people manage budgets, it becomes a lot easier toexplain why prepaid cards should not be legislated out ofexistence.
