This story was updated from its original version.
Florida’s attorney general announced May 19 that she is investigating five prepaid card companies for their fee-disclosure practices.
The agency’s economic crimes division issued subpoenas to Green Dot Corp., NetSpend Holdings Inc., UniRush Financial Services LLC, AccountNow Inc. and First Data Corp., the agency said in a press release.
Besides seeking information about “possible hidden fees” on prepaid cards, some subpoenas also request information about services that claim to improve consumers’ credit scores.
“Failing to disclose fees is essentially stealing money from consumers,” Florida Attorney General Pam Bondi said in the release. “We will aggressively investigate these practices and ensure that Floridians are protected from hidden fees and charges.”
A spokesperson for UniRush, the company started by media mogul Russell Simmons, said in an e-mail it had not received the subpoena and that its fees are transparent on its website. A spokesperson for First Data, a unit of the Kohlberg Kravis Roberts & Co. private-equity firm, said the company is reviewing the subpoena but had no comment.
Steve Streit, the chairman, chief executive and president of Green Dot, said in a statement provided by a spokesperson that the company’s “fee policies and disclosures are well-vetted and well-regarded” and that Green Dot is “supportive of the Florida AG’s inquiry and will certainly respond promptly.”
Prepaid cards function like a regular debit card but are not tied to a checking account. Such companies as NetSpend, UniRush and Green Dot often charge a monthly maintenance fee for servicing customer accounts plus fees for conducting certain ATM and card-reload transactions.
Some companies also charge fees for conducting point-of-sale transactions.
Such fees have sparked the ire of consumers groups, which argue the fees are not properly disclosed or deplete the value of customers’ accounts. The Consumer Financial Protection Bureau is expected to examine prepaid card fees once the agency is operational.
