FOX19 Investigates: Frustrations with prepaid card company NetSpend

(From left) Clarissa, Tiffany, and Norma Trammell discuss their frustrations with NetSpend’s customer service with FOX19’s Matthew Nordin.
(From left) Clarissa, Tiffany, and Norma Trammell discuss their frustrations with NetSpend’s customer service with FOX19’s Matthew Nordin.

MIDDLETOWN, OH (FOX19) - It's not an easy time for Norma Trammell. She's lost her job, has to work temp jobs, is behind on her rent, and the utilities are about to be shut-off. So the $9,677 refund she was expecting from the IRS would've come in handy by now.

"I need it real bad," she told FOX19 inside her youngest daughter's home in Middletown.

Norma's oldest daughter, Tiffany, used TurboTax in late January to do her mom's taxes. One option TurboTax offers for getting your refund is through a prepaid card from a company called NetSpend, which is based in Austin, Texas. Prepaid cards are often the better option for Americans who don't have access to a bank account. But in this case, Tiffany thought it would be faster.

"It's quicker to get it put on the card than waiting for it to get deposited to your account or a check being cut to you," she said.

That's exactly the pitch NetSpend makes on its website. But if you look further, you'll discover that what NetSpend is claiming is that it's faster than waiting on a refund check to be mailed to you. However, the IRS and state treasury departments have been offering direct deposit for years. And according to H&R Block, people usually get their federal refund within 8-15 days.

It turns out, NetSpend wasn't faster for Norma Trammel. Six months later, she's still waiting for her refund. Company spokesman Rob Ward tells FOX19 that a fraud alert popped-up because of confusion over Norma's address. (Tiffany used her address as the mailing address.) So to prevent identity theft, NetSpend put a block on the card.

The Trammels don't quibble over that. However, they have a problem with how NetSpend's customer service dealt with the issue from there. They say their situation is similar to the hundreds of people who have complained to and the Better Business Bureau. Stories they saw after their mom ran into problems.

"I read some of the stories and it was the same m.o., the same thing," said Norma's youngest daughter, Clarissa. "They did the same thing. They would put a block on the money. And then they would refuse to release it until you sent all your personal identification over to them. And then after that, you pretty much never heard from them again."

In the Trammell's case, they can't believe that NetSpend customer service reps were fine speaking to Norma and her daughters on the phone but would still not release the money, despite the family faxing copies of Norma's Social Security card and driver's license from an Office Depot, a fax which the family showed FOX19.

In a phone call with FOX19, Ward said, "I hate that happened to her."

He later added, "I'm sorry it did."

Ward also e-mailed FOX19 a statement explaining that NetSpend is very concerned about identity theft. Ward added that "we also remain vigilant in our efforts to create secure methods of fund access and prevent any fraud on behalf of our customers. Based on customer feedback we are working on a more streamlined process for requesting documents for verification during tax season."

That's something many consumers say is badly needed. As for the Trammells, they say they will never do business with NetSpend again.

NetSpend's spokesman says that his company was in contact with the IRS this week and the agency is mailing a refund check to Norma Trammell after NetSpend returned the money to Uncle Sam. An IRS spokeswoman said that due to federal confidentiality laws she is not able to comment about the situation.

As of now, it appears TurboTax will continue to do business with NetSpend, which TurboTax spokeswoman Ashley McMahon calls "one of the leading prepaid debit card companies in the industry."

At McMahon's request, FOX19 provided her links to the website where consumers have given NetSpend bad reviews and to the Better Business Bureau website where they've filed complaints. However, McMahon still said in a statement hours later, "This is a great option for the millions of unbanked Americans and one our customers have requested."

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