Paramus - At the height of the holiday shopping season, U.S. Senator Robert Menendez (D-NJ) today appeared at the Garden State Plaza Mall in Paramus to announce his new legislation that will address hidden prepaid card fees. His legislation will be introduced in the Senate in the next two weeks and will rein in certain hidden fees as well as increase upfront disclosure of fees before consumers purchase a card. The bill will include:
• A ban on overdraft fees, balance inquiry fees, customer service fees, fees for inactivity, account closure fees, and others types of fees
• A clear wallet-sized explanation of all fees for consumers before they purchase a card
• Protection for consumers' prepaid card money against loss, theft or bankruptcy of the company through which they purchase a card
"The way some prepaid cards are laden with absurd fees, you'd think the Grinch himself had devised them this holiday season," said Menendez. "Responsible consumers are finding out the hard way that the purchasing power of these cards is much less than they thought - much less than the dollar amount they loaded onto them. My legislation would give them peace of mind during the holiday season and beyond."
"While the Kardashian Kard got a lot of attention these past few weeks, it's not the only prepaid card loaded with high fees and other gotchas," said Chuck Bell of Consumers Union, the nonprofit publisher of Consumer Reports, who joined Menendez today. "Most prepaid cards come with a laundry list of fees that can add up quickly and have weak protections that leave consumers vulnerable to losing their money if their card is lost or stolen. Now that prepaid cards are becoming increasingly popular, it's time to rein in the high fees and make sure consumers get the protections they deserve."
The market for all kinds of prepaid cards is estimated to top $427 billion next year in the United States. The fees associated with these types of cards have been in the spotlight recently following the Kardashian sisters' decision to end their endorsement of a card laden with hidden and unnecessary fees. A news report today indicates that banks are expected to focus their business on prepaid debit cards to raise revenue, after Congress enacted credit and debit card reforms: http://online.wsj.com/article/SB10001424052748704377004575651072113863694.html?mod=ITP_moneyandinvesting_0.