SACRAMENTO (CBS13) — Living without a bank account since he was the victim of a scam, Alvin Prasad has his paycheck directly deposited onto a prepaid debit card. When he tried to access his money, he says someone fraudulently drained his card.
“I felt sick to my stomach,” he recalls feeling.
He had no way to pay his rent.
“I’m going to get kicked out. I’m going to need a new place to live,” he said.
He says the card company told him there wasn’t much they could do.
“I’m not one to swear or get loud, but I did,” he said. “I had no idea what to do. I’ve never been in a situation like this.”
Prasad is among 23 million Americans who use prepaid cards. The Federal Government claims one in 10 households uses one as their primary financial tool.
Federal laws protect debit and credit card users from fraud., but Creditcards.com spokesman Matt Schulz says that same protection does not apply to prepaid cards.
The Consumer Financial Protection Bureau pushed to change that, drafting new rules that force financial institutions to investigate fraudulent claims tied to prepaid cards and to put the money back in your account during the process.
‘They extend a lot of the same coverage that you see with credit cards or with debit cards,’ Schulz said.
Those rules were set to go into effect in October. However, some prepaid card companies pushed back getting the deadline delayed to April. However, now some Republican lawmakers are pushing to repeal the protection altogether.
After two months, Alvin says his card company returned his money. Fortunately, his landlord was understanding about his late rent.