US Federal Reserve fines Walmart-linked Green Dot Corp $44 million after customers lost access to funds
![US Federal Reserve fines Walmart-linked Green Dot Corp million after customers lost access to funds US Federal Reserve fines Walmart-linked Green Dot Corp million after customers lost access to funds](https://i1.wp.com/media-cldnry.s-nbcnews.com/image/upload/t_nbcnews-fp-1200-630,f_auto,q_auto:best/rockcms/2024-07/240719-green-dot-corporate-hq-se-337p-384323.jpg?w=1200&resize=1200,630&ssl=1)
Green Dot Corp., a company that partners with Walmart to sell the retail giant prepaid debit cards, has been fined $44 million by the Federal Reserve for “numerous” alleged misconduct that harmed consumers over a period of at least five years.
In a statement Friday, the Fed said Austin-based Green Dot violated consumer law and engaged in unfair and deceptive practices that prevented users from accessing their own money.
The Fed identified instances of alleged wrongdoing by Green Dot from 2017 through December 2022, including failing to properly close accounts and assess fees on them, and denying certain customers access to funds while providing inadequate means for those customers to remediate the situation.
She also said Green Dot failed to inform customers that they could no longer register debit cards over the phone after the company discontinued that service, and failed to properly disclose the fees it charged when it partnered on tax refund filings with TurboTax.
In addition to the fine, Green Dot is required to implement numerous new compliance efforts that Federal Reserve regulators must approve.
Last year, NBC News reported on problems experienced by Green Dot card users that extended beyond the time frame identified by the Fed, with affected customers describing “nightmare” scenarios as recently as August 2023 in which they were unable to pay their bills on time because they couldn’t access their money in a timely manner.
A Green Dot spokesperson said most of the issues identified by NBC News reports were the result of a system upgrade.
In a statement Friday, Green Dot CEO George Gresham said the company was “pleased to confirm that the consent order has been finalized.”
“The order addresses practices that have been in place for years, and we have taken and will continue to take significant steps to correct and address these issues, including significant updates to our processes, product packaging and marketing, our management team and our compliance programs,” Gresham said.
“We are committed to cooperating and working closely with our regulators to ensure that all concerns identified in the Consent Order are addressed and respected and that our customers are well served and protected at all times. As stewards of our customers’ valuable resources, we take this commitment and responsibility very seriously.”
Green Dot had signaled in March that enforcement action would be taken as part of its first-quarter earnings report.
Representatives for Walmart and TurboTax’s parent company, Intuit, did not immediately respond to emailed requests for comment.