I have been a Netspend account holder for less than a year. In that time, I have seen some of the blog posts, reviews, and forum threads on Google about Netspend being a scam or a rip off. But I had never paid them much attention. Since signing up for the debit card, I had never experienced any problems.
Sure, the fees were high compared to most other prepaid debit cards I’d seen, but not high enough for me to go through the trouble of canceling my account. So, like most people, I ignored the numerous warning signs I saw. But, that all changed this past week.
I awoke early last Thursday morning. I was expecting a deposit to reach my Netspend bank account that day and I was planning to head to Walmart to pick up a few household items. Before leaving I turned on my laptop to check my e-mail and then my Netspend account, expecting to see the deposit that should have cleared, in addition to the money I already had in there.
When I attempted to log in to my Netspend account I received a message that I had entered the wrong password or username. I didn’t think I had, but I tried again. Same thing. Right then, I knew something was wrong. This had never happened before, but I just knew something was not right. I called the number on the back of my Netspend account to check my balance. The recorded voice informed me that my balance was negative $7.52. How could this be? I didn’t have any pending transactions. My card had not left my possession. Ever.
If this has happened to you before, you know the sickening feeling that you get immediately after. Anger, disappointment, confusion all mixed into one. Since the Netspend customer service office wasn’t open for two hours, I had nothing to do, but sit there and wait. I could not do anything, since I had no money.
I sat there and thought about a number of things including the items that I needed and could no longer buy, as well as the plans that I had made for the weekend, which I could no longer do. Needless to say, it was a pretty miserable two hours.
Finally when the Netspend customer service office opened, I called them to try and find out what had happened. Before making the call, I was expecting the worst. While waiting, I had read a several other horror stories online from customers describing money also being stolen from their accounts and how unhelpful and terrible their customer service is.
So, I made the call and it went pretty much as expected. I was placed on hold several times and required to answer the same questions over and over. I had to speak with three different customer service agents, two of which had trouble speaking English. None of them were particularly helpful to my situation, nor did they seem to care that I had been ripped off and money had been stolen from my account. They acted like this was an everyday occurrence, which apparently with Netspend it is.
What I did find out was that an unauthorized “cardholder transfer” had taken place. I had never used a cardholder transfer, nor did I know that they even existed. Netspend customer “Monica Williams” (no, I don’t know her nor have ever heard of her) had transferred all of the money out of my account. In order to complete a cardholder transfer, the Netspend customer needs the card number and security code on the back of the card. The card has never been out of my possession.
One of the most ironic parts of my call was the numerous security questions I had to answer in order to inquire about my account. I found that quite amusing, since the person who scammed money out of my Netspend account did not have to answer any.
The last Netspend customer service person I was transferred to was a “Disputes Investigator” (Netspend is aggressively hiring for this position via their Twitter account, since this problem is clearly on the rise). He spoke clear English and was well trained at his position. Speak calmly and firmly at the emotionally distraught person who has just had money taken from their online account. Repeat the same instructions over and over.
Basically, he told me I needed to file a police report, have it notarized, supply some more details, and then fax the information to them. Then you might get your money back in a couple of months. Here it is in their words:
After we receive the required documentation from you it will be reviewed within 10 business days. The claim will be reviewed to determine if we have enough information and documentation to prove your case against the merchant. A determination will be made if a credit will be applied to your account pending the completion of your dispute claim investigation through the Visa/MasterCard Associations. (Average 45-90 day timeframe).
The whole process they require is a joke. It’s as if they try to make it as inconvenient for you to complete the steps in hopes that you won’t do it. Go to the police station and file a police report? For an online fraud case? Right. Fax the information in and have it notarized? You’ve got to be kidding.
After getting off the phone with them, I realized I still couldn’t access my Netspend account online. Being so preoccupied with trying to find out what had happened to my money, I had forgotten to ask. So, unfortunately I had to call them back. Again, I was transferred three times, placed on hold, and asked several security questions.
The last set of questions was a true delight. The customer service agent I spoke with had the poorest English of all of the reps I had talked to that day. I had to answer five personal credit questions dating back to 2004. If I did not answer four of them correctly, I would not be able change my password and could try again in 24 hours.
After I answered the random questions, I was pretty sure I had failed. I could hardly understand the guy. Fortunately, I passed and was emailed a new password. Before I hung up with the rep, he asked me one more security question for good measure. It was getting comical.
I don’t think the Netspend company is a scam or a rip off. What I do think is they have major security issues and that they are completely negligent. Consequently, your money is not safe in their hands. Unauthorized account transfers are happening more and more. Customers’ bank accounts are being completely wiped out and Netspend is putting the onus on the victim. Not themselves, not the criminal.
Why do they even allow customer to customer transfers when there is clearly a security breach in their system? Why do they not give you an option to turn off these types of transfers? I have never used them and never would.
Why do you not receive an email confirmation when your password has been changed? Why did I not receive an email that money had been transferred out of my Netspend account? There are simple steps that could be taken by Netspend in order to avoid this from happening in the future. But, they are not being taken.
So what should you do? If you are a Netspend customer, I would close your account as soon as possible. Your hard earned money is not safe. You never think this can happen to you until it does. Believe me, I know. It’s a horrible feeling and a terrible predicament to be put in.
And for those thinking about signing up, don’t. There are several other prepaid debit card companies to choose from. Banks who can handle and manage your money much better than Netspend.
If anything like this has happened to you, please share your story below in the comments section.