Card issuer Bancorp Bank has been imposed a fine by the Federal Deposit Insurance Corporation (FDIC) over alleged unfair and deceptive practices concerning the transaction fees of the bank’s prepaid cards.
The settlement reached by the organisations involves relief for customers who were charged more than what was disclosed by the bank between 3 December 2010 and 8 November 2014.
These overcharges are reported to be for some point-of-sale, signature-based transactions on select stored-value cards, including the Excella Visa Prepaid Debit Card and other reloadable debit cards.
Bancorp Bank is required to pay restitution of up to $1.3m to around 243,000 cardholders, and a civil money penalty of $2m. The FDIC has ordered the bank to come up with a restitution plan within 30 days.
The plan is set to differentiate consumers who have already received reimbursement from those entitled to reimbursement, along with methodology for calculating the restitution amount and the process of restitution.
A statement by the FDIC reads: “The bank shall fully implement the restitution plan, including making payments or providing credits to all of the eligible consumers, within ninety (90) days of receipt of non-objection from the FDIC Regional Director.
“Any required restitution shall be made by credits to the Excella Card accounts and Non-Excella Card accounts of eligible consumers.”