Prepaid Card Association Publishes “Leading Practices” for Prepaid Card Disclosures

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The Network Branded Prepaid Card Association published guidelines on September 29, 2009 aimed at Network Branded prepaid debit cards within the general purpose reloadable cards industry. These guidelines are designed to set industry-wide disclosure standards to guide purveyors of branded general purpose reloadable cards in appropriate communication with customers.

General purpose reloadable cards, also known as pre-paid debit cards in some circumstances, provide a banking alternative to students and other’s who wish to avoid check cashing services or traditional banks. Many of these cards are “network branded” cards, which means that they carry a Visa, Mastercard, Discover, or American Express logo.

These network branded cards, like other pre-paid debit cards, can be reloaded in a variety of ways: online, at point-of-service locations, and sometimes by direct deposit. The cards can be used like standard credit cards to make purchases, and sometimes to withdraw money from ATMs.

The Leading Practices Guide proffered by The Network Branded Prepaid Card Association sets forth industry standards for clear communication. The not-for-profit organization promotes clear and easy to understand disclosures that users of the cards can understand. As Kirsten Trusko, President and Executive Director of the NBPCA states, “the Leading Practices will support and encourage [this] communication, and help ensure that consumers understand all relevant terms before they acquire new prepaid cards.”

No specific disclosures are set forth or mandated, but the NBPCA urges clear disclosures and addresses industry practice for front and back of card disclosures, as well as disclosures on packaging, websites and other advertising. This industry guideline can be found here.

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