In response to the CFPB’s advance notice of rulemaking requesting public comment on general purpose reloadable cards (see May 29, 2012 Alert), the FTC staff submitted a comment in support of the request for information and the need to protect card users. In its press release, the FTC noted that consumers may not be aware that reloadable cards are not afforded the same federal law protection as similar products, such as credit and debit cards. The FTC staff’s comment focused on four types of protections that have been applied to other payment cards: (1) extending liability limits for fraudulent or unauthorized use; (2) clear and prominent disclosure of fees and expiration dates; (3) dispute and error resolution procedures; and (4) recurrent payments. The FTC noted that expanding these protections to reloadable cards may result in increased costs to consumers and card providers and sellers, and recommended that the CFPB seek public comment on specific requirements for each of the discussed protections.
Alert August 07, 2012