The biggest news this week revolved around a new prepaid debit card being offered by the world’s largest retailer and one of the major credit card issuers.
Walmart and American Express recently announced that they were going to release a new prepaid card option specifically targeted to the store’s lower-income shoppers.
Gerri Detweiler, Director of Consumer Education for Credit.com, says there are a few things consumers should consider before signing onto a prepaid product like Bluebird.
“Understand that with a prepaid card you don’t have the same consumer protections you have when you use a credit card to make a purchase,” she says. “You can’t dispute a charge if there is a problem with something you buy on a prepaid card. Instead it’s more like paying cash for the item.”
Is a flight attendant or a retail cashier qualified to sell you a credit card? That’s the question at the center of this article, which examines who is and isn’t qualified to sell a complex, fee-laden financial product like a credit card.
“It is not new to have all kinds of people selling credit cards,” says Linda Sherry, director of national priorities for Consumer Action. “It’s not an issue of being uninformed, but being tightly controlled to stick to a script and not having much more info outside the script.”
Alleging that the bank has poorly underwritten numerous mortgages based on data indicating a high number of defaulted mortgages, Manhattan U.S. Attorney Preet Bharara has filed a civil lawsuit against Wells Fargo.
According to the lawsuit, the government is seeking financial retribution for roughly a decade’s worth of misconduct in lending, which led to millions of dollars in defaulted home loans. The Federal Housing Administration has had to pay out claims on many defaulted loans it insured during that span under the Direct Endorsement Lender Program.
Image: NS Newsflash, via Flickr