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Amazingly brazen prepaid CC scam. Visa,Masterc
I'm sure we've all heard about prepaid credit cards or "gift cards" being a big scam before. For instance they charge hidden fee's or monthly charges which dwindle down your balance to nothing as you keep it stashed in your drawer saving it for a rainy day completely unaware.
(This scam is not about hidden fee's or penalties btw)
I live in Canada and I had a prepaid credit card (though a 3rd party business called The Cash Store). One day I came in with $50.00 to put on my card and was shocked to hear the cashier tell me my new balance was $29 I asked her what the hell happened to my money and she started explaining fees I owed and penalties like the "negative balance fee". Isn't the entire point of a prepaid credit card so that you don't have to worry about a negative balance? I'm giving them cash!! Not borrowing money. She couldn't even explain the charges herself but she was sure they were accurately applied.
Anyway, I soon switched to gift cards. These are the prepaid Visa and Mastercard's that come in $20, $50 $100, $250 versions etc. Much simpler and only one charge at the time of purchase (that I'm aware of).
Now here's where I discovered one of the boldest scams I've ever seen from one of these companies. I have sort of a unique perspective because I've bought so many of these cards. I literaly have a stack in my drawer from the last year because I use them on a monthly basis.
What I noticed is that if you actually use the card for online purchases, which are fairly anonymous, informal transactions, your card will eventually go broke. Or at least you'll have a balance like 0.75 cents thereby causing you to throw out the card and buy another one. (this alone is quite a bit of money the CC companies are making off of unclaimed balances that can't be spent).
I on the other hand have kept my cards many months after, reluctant to throw them out. What I've noticed is that somehow a lot of the charges end up getting reversed and the money put back on the card weeks or months after you've written off the card and likely thrown it out. I just went through my stack again the other night and noticed yet another card has miraculously been blessed with a $38.00 returned transaction.
Actually I'm not sure if they're charges getting reversed because they didn't go through properly or if it's because the CC company took too much off your card for some reason and is putting it back. I have no clue. All I know is that it's happening. Either they're scamming ME or the online businesses that I'm buying from. Or the most likely scenario; they're screwing BOTH of us at the same time!
You think that since these cards have a set amount of cash on them there's no room for debate. You pay the money, you spend the money, you lose the money BALANCE GONE!! But apparently Visa and Mastercard have found a way of causing either transaction issues or balance reporting issues and MANY of them get reversed or are charged back or money released back on to your card. Who knows?. Luckily for them you've already thrown the card out because you trust their data. What happens to that unclaimed money? Charity?
This could not possibly be innocent. The amount of money they must be raking in off of this anomaly has to be astronomical so it's not like they could ever be unaware of the issue since they probably make more money on peoples unclaimed balances then they EVER will on the sale of the card itself.
I've honestly never seen transaction records as schizophrenic as these gift cards. If 1 out of every 4 transactions ends up getting refunded then how can you be doing your job properly as a credit card company? That's absolutely incompetent. Either that or very calculated fraud!
Some day I'd love to see someone at either of these companies get actual jail time for this kind of predatory lending (or I guess in this case it's just predatory taking). Or at least exposed personally so we can all see them for what they are.
I won't hold my breath though.
Last edited by Tybomb : 03-23-2012 at 04:59 PM.
Re: Amazingly brazen prepaid CC scam. Visa,Masterc
UNBELIEVABLE! I have a $250 prepaid gift card I bought almost a year ago. I used it to buy a couple things online and wasn't sure how much was left over but it wasn't much. Maybe $30. Eventually I think the balance ended up being $15 or so but I didn't use it for a long time and I wasn't too surprised when I went to log in one day to check the balance and my password wouldnt work. I assumed somehow Visa found a way to take the rest of my balance and the card was no longer active.
Now months have gone by since I lost access to that account and decided the card was defunct but I was trying to sign up for a netflix account today and dug that old card out again from the bottom of the drawer. I was going through my old cards hoping to find one that works and somehow this card DID work!
I was shocked and immediatly went to the VISA PREPAID site and tried to log in with the same username and password (which I had written down since the beginning) and it STILL didn't work even though apparently the card was working and had a balance.
I clicked the "forgot password" link and had a new one sent to my email address and finally logged in to find a fully functional account with a balance of $9.50 and a new monthly maintenance fee that had just been tacked on.
So now I'm adding a new accusation on to the pile these psychopathic shysters should have to answer to.
It's possible VIsaprepaid purposely corrupts customers accounts when a card is not used in a few months so the customer will assume the card is empty or otherwise just can't be bothered troubleshooting for a few dollars thereby allowing Visa to empty out your account with Maintenance fee's in time.
These people are absolute scumbags! They should all be in prison!
Last edited by Tybomb : 06-12-2012 at 06:10 PM.
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