In light of the recent Target data breach, Visa has introduced a new set of standards for its prepaid cards with an aim to help protect consumers from credit card fraud. Although issuers are not required to follow these standards, cards that meet the requirements will receive Visa’s designation which will, in theory, spur customers to demand more positive characteristics.
New standards address fee structures and overdraft coverage, as well as several important consumer protection provisions. To get the Visa designation, issuers must offer FDIC/NCUA insurance and standard dispute resolution rights. To safeguard cardholder’s from credit card fraud, Visa is also offering a Zero Liability policy and access to Visa’s Prepaid Clearinghouse Service. On the downside, the Visa Zero Liability policy doesn’t apply to PIN-based transactions that aren’t processed by Visa, and it also doesn’t cover ATM transactions.
While Visa’s strategy won’t perfect the prepaid debit card industry, their efforts to protect consumers are a step in the right direction, and it is entirely possible that regulators like the Consumer Financial Protection Bureau might eventually use them as guidelines for future regulation.
If you have been a victim of credit card fraud or you would like to know more about your consumer rights, contact the Chicago consumer fraud lawyers of Markoff Leinberger at 1-877-905-5161 to schedule a consultation today.