A billion-dollar fintech firm is preparing to send a total of $735,000 to tens of thousands of customers in a major settlement with regulators.
New York Attorney General Letitia James says she’s secured more than $1 million from Netspend.
The AG’s office says the firm, which provides reloadable debit cards and payroll cards, violated numerous consumer protection laws and charged “outrageous” interest rate fees, hurting predominately low-income New Yorkers.
“For years, the company illegally froze its customers’ accounts and turned over their funds, which should have been protected, to debt collectors instead.
Netspend also charged illegal fees on its debit and payroll cards that cost customers hundreds of thousands of dollars, and operated a paycheck advance program that charged customers illegally high interest rates.”
The firm has agreed to distribute the $735,000 and change its policies to comply with New York’s consumer protection laws.
The firm will also pay over $350,000 in penalties directly to the state.
People with active debit or payroll accounts at Netspend will have their accounts credited for restitution, and anyone without active accounts is expected to receive checks in the mail directly from the company.
Netspend’s consumer business was acquired by Rêv Worldwide and Searchlight Capital Partners for $1 billion in 2023, and they operate the firm under a new parent company called Ouro.
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