The FTC has blocked prepaid credit card company EDP after complaints of unauthorized withdrawals.
The Federal Trade Commission has clamped down on a California-based online prepaid card marketing operation that the agency says took money out of consumers’ bank accounts without their knowledge or approval.
“The victims’ aggregate loss is in the millions of dollars \u2026 involving thousands of consumers,” the FTC alleges in a 31-page complaint filed in federal court. The agency announced this week a federal court has granted the FTC’s request to temporarily block California-based EDP Technologies Corp. and related companies from making unauthorized debits from consumers’ accounts.EDP markets at least 22 prepaid cards, including the Acclaim Visa, Impact Visa, Sterling Visa, VIP Advantage Visa, Vue Visa, Elite Plus MasterCard, Impact MasterCard, Secure Deposit MasterCard, VIP MasterCard and Vue MasterCard. The company most recently made a splash when it announced the introduction of two new prepaid cards featuring the likenesses of musical icons Johnny Cash and Elvis Presley.
But what caught the attention of regulators were EDP’s charges: $159.95 for its prepaid cards, made up of a $59.95 application fee, $90 processing fee, and a $10 bonus rebate, which it marketed as being loaded onto the card if activation takes place within 30 days of receipt.
The FTC complaint charges that EDP debited money from accounts belonging to three types of consumers:
• Consumers who applied for one of EDP’s prepaid cards, but were unaware of the fee due to EDP’s insufficient disclosures. While the EDP website allegedly claimed consumers would pay “No Annual Fees” and “No Security Deposit,” there was no mention made of the $159.95 charge to their accounts. Many consumers who did not submit their partially filled-out online applications apparently had their information accessed by EDP.
• Consumers who had some interaction with EDP, but did not apply for a MasterCard or Visa debit card. Consumers in this group applied online for unrelated short-term loans at sites operated by both the defendants and third parties.
• Consumers who had no interaction with EDP and were unaware of how EDP learned their account information. In one case, a consumer in this group did not have access to a computer at the time EDP said she applied for a card.
FTC documents indicate that EDP operated a “scheme” since at least April 2002 that “debited money from consumers’ bank accounts without their consent, in conjunction with the marketing of MasterCard and Visa prepaid cards.” The victims’ aggregate loss totals in the millions of dollars and involves thousands of consumers, based on the number of returned transactions.
Victims who attempted to retrieve their funds were apparently provided with little assistance when they directed complaints to the firm.
EDP was unavailable for comment. A call to the company’s phone number was answered by a recorded message that says “at this time we are only accepting your questions and comments in writing,” adding EDP is not receiving e-mails at present.