Federal Reserve fines Walmart-linked Green Dot Corp $44 million after customers lost access to funds
Green Dot Corp., a company that partners with Walmart to sell prepaid debit cards at the retail giant, has been fined $44 million by the Federal Reserve for "numerous" alleged failures that harmed consumers over a period of at least five years.
In a release Friday, the Fed said Austin-based Green Dot had violated consumer law and committed unfair and deceptive practices that resulted in users being unable to access their own money.
The Fed identified instances of purported wrongdoing by Green Dot starting in 2017 and continuing through December 2022 that included failing to properly close accounts and assessing fees on them, and denying certain customers access to funds while offering inadequate ways for those customers to redress the situation.
It also said Green Dot failed to notify customers that they could no longer register debit cards by phone after the company discontinued that service, and that it failed to properly disclose the fee it charged while partnering on tax-refund deposits with TurboTax.
In addition to the fine, Green Dot is required to implement numerous new compliance efforts that Federal Reserve regulators must approve.
Last year, NBC News reported on issues faced by Green Dot card users that extended beyond the timeline identified by the Fed, with affected customers describing "nightmare" scenarios as recently as August 2023 of being unable to pay bills on time because they could not gain timely access to their money.
A Green Dot spokesperson said most of the issues identified by NBC News reporting were the result of a system upgrade.
In a statement Friday, Green Dot CEO George Gresham said the company was "pleased to confirm the consent order has been finalized."
"The order relates to practices in place years ago, and we have taken and will continue taking meaningful steps to correct and remediate those issues, including significant updates to our processes, our product packaging and marketing, our management team and our compliance programs," Gresham said.
"We are committed to cooperating and partnering closely with our regulators to ensure all concerns noted in the consent order are addressed and complied with and that our customers are well-served and protected on an ongoing basis. As stewards of our customers’ valued resources, we take this commitment and responsibility very seriously."
Representatives for Walmart and TurboTax parent Intuit did not immediately respond to emailed requests for comment.
