(TRENTON) – The Assembly Consumer Affairs Committee advanced legislation on Thursday sponsored by Craig Coughlin (D-Middlesex) and Dan Benson (D-Mercer, Middlesex) to ensure customers who purchase pre-paid debit cards are clear on fees and charges associated with activation and use.
“All prepaid cards are not the same, some come with numerous fees,” Coughlin said. “There are charges to load money, activate the card, speak to customer service or check the balance at an ATM. These charges can add up pretty quickly and eat away the cash on the card. Consumers should be made fully aware of all the costs associated with any prepaid debit card purchased.”
The bill (A-3210) required an issuer of a prepaid debit card to provide, for the benefit and use of the cardholder recipient or potential recipient, a disclosure of all fees and charges associated with the activation and use of the prepaid debit card, including with respect to any transaction or service provided by or with the card, and any dormancy fee for non-use, in a clear and conspicuous manner on the card’s package. The Director of the Division of Consumer Affairs is directed under the bill to adopt rules and regulations necessary to implement the provisions of the bill with respect to such disclosures.
“Prepaid debit cards have grown quickly in popularity for individuals without checking accounts and for college students safeguarding their credit,” Benson said. “With this bill, we encourage transparency and ensure that prepaid debit cards continue to be a safe banking alternative for consumers.”
A violation of the bill shall be an unlawful practice and violation of the consumer fraud act. Under the consumer fraud act, violation is generally punishable by a monetary penalty of not more than $20,000 for any subsequent offense. In addition, a violation may result in cease and desist orders issued by the Attorney General, the awarding of treble damages, and attorney’s fees and costs to an injured party.