Home > 2011 > Credit Cards > Russell Simmons’ Prepaid Card Company Subpoenaed

Russell Simmons’ Prepaid Card Company Subpoenaed

Advertiser Disclosure Comments 2 Comments

RussellSimmons_Brett_Weinstein_WikimediaCommonsFlorida’s attorney general subpoenaed the prepaid debit card company owned by hip hop mogul Russell Simmons on Thursday, plus four other large prepaid card companies, on allegations that the companies charge deceptive fees.

“Failing to disclose fees is essentially stealing money from consumers,” Attorney General Pam Bondi said in a press release. “We will aggressively investigate these practices and ensure that Floridians are protected from hidden fees and charges.”

[Article: A New Trend–Plastic Paychecks?]

Bondi’s office has received complaints from consumers that prepaid debit card companies hide various fees. Some cards charge a fee every time a consumer makes a purchase, but that fee is not always disclosed up front, according to Bondi’s office.

Some companies, including Simmons’ UniRush, promote their prepaid cards as a way for consumers to improve their credit scores. Bondi will investigate whether these claims are “possible misrepresentations.”

In addition to UniRush, the subpoenas went out to Green Dot, which recently signed a contract with Rite Aid to offer the drugstore giant’s employees the choice to receive their paychecks via prepaid debit card. Other subpoenas went to First Data Corporation, Account Now, Inc. and Netspend.

[Resource: The Subprime Guide to Plastic]

Image: Brett Weinstein, via Wikimedia Commons

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • http://www.nbpca.org JenniferNBPCA

    I work with the Network Branded Prepaid Card Association (NBPCA) and we were disappointed to learn of the Florida Attorney General�s investigation into five prepaid card companies for alleged deceptive and unfair practices.

    The NBPCA supports transparency in disclosure of fees to consumers (http://tinyurl.com/42926wv), prior to purchase, so they clearly understand the terms and conditions associated with prepaid cards prior to purchase. In members� drive to set a high industry bar in delivering safe, convenient and efficient prepaid cards to consumers, the NBPCA developed disclosure and consumer best practices on general purpose reloadable cards also known as prepaid debit cards.

    Representing over 70% of the open loop card or branded cards issued in the US, NBPCA members also agree to adopt NBPCA�s Code of Conduct and Guiding Principles. For more information, please visit us online.

    Jennifer Tramontana, NBPCA

  • Eric Knight

    Actually, Simmons’ information was only PART of the picture. What the feds ALSO wanted to obtain was EVERY account that he processed, so the feds could have the identities of all those who purchased such a card. Then what the feds do is track the usage of such cards, perhaps for illegal downloading or child porn, and THEN they can have a name connected to an illegal activity.

    So if you are looking to get an anonymous card, be aware…IT IS NOT ANONYMOUS FROM THE GOVERNMENT. They WILL come back and bust you once they have the information and can provide a paper trail to nail your ass.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.