SAN FRANCISCO (CBS 5) – A lack of legal protection on pre-paid debit cards left one Bay Area man out over $200.
Sam Gold used his pre-paid WePay debit card to withdraw $200 from his local Wells Fargo ATM. Gold expected to see a $3 processing fee on his receipt because he wasn’t a Wells Fargo customer. However, when he received his bank statement, a second transaction of $203 was tacked on.
“I thought they ripped me off,” Gold said.
He assumed that since he withdrew his money from a Wells Fargo ATM, Wells Fargo could fix the problem and refund his money. When Gold talked to someone at the branch, however, he was told he had to contact his bank.
Although that may seem strange, Suzanne Martindale of the Consumers Union said that is the law. There are federal regulations that prevent Well Fargo from dealing with Gold because he is not one of their customers.
“Unfortunately with pre-paid debit, you simply don’t get the same legal protections so you don’t have legal guarantees from any of these people,” Martindale explained.
Debit cards are linked to individual bank accounts and are protected under federal regulations, but pre-paid debit cards did not exist when those regulations were created, meaning pre-paid debit card holders don’t have the same protections as traditional debit card users.
“It’s the same thing over and over again. Technology moves faster than the law does,” Martindale said.
The Consumers Union is now calling on the government to update regulations and protections for those with pre-paid debit.
What Gold and others in his situation should do is contact the bank that issued his pre-paid debit card, in this case, the Bancorp Bank. The bank that owns the ATM that malfunctioned and the pre-paid debit card company are not responsible.
After ConsumerWatch’s investigation, Bancorp has promised to reimburse Gold.
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