Disclosure Policy

Issue

Disclosure Policy

NBPCA Position

The NBPCA strongly supports and encourages clear, simple and conspicuous disclosure of all terms and conditions that apply to network branded prepaid cards. Consumers should have access to information prior to purchase to allow them to make informed decisions and meaningful comparisons of card products.

Explanation

Disclosures are essential to consumer decision making and usage of network branded prepaid cards.  NBPCA is dedicated to setting industry standards for disclosures that are clear, simple and informative. Working with its members, NBPCA has developed Leading Practices for Consumer Disclosures on General Purpose Reloadable Cards which go beyond the current legal requirements of clear and conspicuous disclosure of dormancy, inactivity and service fees on the card or on card packaging for gift cards and loyalty, award and promotional (LAP) cards.  In addition, disclosures regarding expiration dates and certain terms and conditions are required by various federal and state regulations.

Disclosures on the Card
Recognizing that disclosure materials at the point of sale may be constrained by the size of cards and card packaging, NBPCA recommends at a minimum, disclosure of the following information on the prepaid card itself:

• The "valid thru" or "good thru" date should be clear and conspicuous on the front of the card. This information signifies the expiration date of the physical plastic but not the underlying funds. These dates serve the same critical fraud control and security purposes as they do on credit or debit cards.
  
• Toll-free phone number and web address (if applicable) for customer service, including where the consumer can obtain more information about the card program, including applicable fees.
  
• Name of the financial institution issuing the card.

Disclosures for Prepaid Cards Prior to Purchase
Prior to purchase, the purchaser/consumer should be advised of any fees associated with the purchase, activation and loading of prepaid cards. In addition, prior to purchase, consumers should be informed of a toll-free phone number and/or website where they can obtain information on all fees, terms and conditions that apply to the prepaid card. Provided below are examples of items that should be disclosed via the telephone, website, or packaging:

• Any applicable fees, including, point-of-sale (POS) transaction fees (both PIN-based and signature-based); card reload fees; live operator fees, ATM withdrawal and balance inquiry fees; and any monthly fees;
  
• A statement that there are terms and conditions affecting the use of the card and that they are contained inside the packaging or available on the card issuer’s website
  
• The type of identification the purchaser will be required to present to activate or reload the card, if applicable
  
• A statement advising the consumer not to purchase the card if it appears the packaging in which the card is embedded has been opened or tampered with
  
• Card load and balance limitations, as applicable
  
• A toll-free phone number or a website that consumers can access to obtain additional information regarding the prepaid card program
  
• If a card is sold through a website, then in addition to the guidelines above, the website should provide
  
• - An online verification on which consumers can click to verify they have read and agreed to the terms and conditions, including fees, before they can complete the online purchase of a card
  
• - Clear and conspicuous explanation of the terms and conditions of the prepaid card product

Consumers may obtain prepaid cards from a number of places, including employers, government agencies, insurance companies, retailers and charities. A transparent approach to disclosure enables card issuers to design disclosure materials with terms most important to consumers on the packaging – such as purchase, activation, loading, or recurring fees, and those for commonly used services - while providing other information in an accompanying insert, website, or posting at the retail site.

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