On July 19, 2024, the Federal Reserve Board announced it had fined a Utah-based company that offers prepaid debit cards $44 million for alleged unfair and deceptive practices as well as an alleged deficient consumer compliance risk management program.
In its Order to Cease and Desist and Order of Assessment of a Civil Money Penalty Issued Upon Consent, the FRB accused the company of violating Section 45 of the Federal Trade Commission Act. The FRB stated that the company “failed to adequately disclose the tax refund processing fee for tax preparation services offered on a third party’s website,” “blocked access to accounts of legitimate customers receiving unemployment benefits,” and “lacked reasonable policies and procedures to help those customers cure those blocks.”
In addition to the fine, the company will hire an independent third-party to strengthen its consumer compliance risk management program, develop an effective anti-money laundering program, and hire an independent third-party to conduct a review of certain transaction activities.
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