Green Dot Corporation - Moneypak To Bank Account

Green Dot Corporation is an issuer of prepaid MasterCard and Visa cards in the United States. These products are available at more than 60,000 retail stores, including CVS, Rite Aid, Walgreens, RadioShack, and Dollar Tree ; as well as with discounted offerings at Meijer and Walmart. Green Dot also transfers individual's direct deposit funds (such as Social Security payments) from the US government to personal bank accounts.

The cards may be used like normal debit or credit cards, but they are not backed by a checking account or line of credit. Purchases are deducted from the balance stored on the card. The user can add more money to the card by paying cash at a retail store's point of sale, or in certain cases from their paycheck. In this sense, these cards have some of the features of a bank account.

Green Dot is headquartered in Pasadena, California, and it was formerly known as Next Estate Communications. The company provides co-branded card programs to Walmart, Boost Mobile, AT&T and Citibank. In 2007, Green Dot raised $20M in funding, including Sequoia Capital as an investor. In 2008, Green Dot ceased to offer prepaid Discover cards.

History

The Green Dot corporation was founded in 1999 by Steve Streit. Green Dot was formerly known as Next Estate Communications. The first debit card to be sold was I-GEN in the year 2000. It was geared toward teenagers and Internet users. In 2001 the first I-GEN MasterCard was sold at a Rite Aid in Virginia. In 2002 the first Green Dot debit cards were sold at more Rite Aid stores as well as CVS Pharmacy, and Pantry Convenience stores. In 2003, the I-GEN card was sold in over 18,000 stores nationwide and geared toward adults. In the year 2004, I-GEN officially changed its name to Green Dot and started the first cash-accepting network for reloading the debit cards. In 2005, Green Dot created additional debit cards for everyone's needs. Finally, by May 2006, Green Dot sold more than two million cards nationwide and opened more retailers to issue more cards internationally.

The company tendered an initial public offering in 2010 and reached a peak stock price in early 2011. As of March 2013, the company's stock is trading at 60% below its initial offering price.

On September 24, 2014, Walmart announced it would be partnering with Green Dot Bank to begin offering Walmart customers checking accounts. The accounts will be provided through GoBank, Green Dot's mobile checking service

Cards

Green Dot debit cards are available in many stores, including CVS Pharmacy, Kmart, 7-Eleven and Walgreens. This is only a temporary card which does not have the customer's actual name on it; instead it says "Valued Customer". Temporary cards are not re-loadable. However if the customer opts in to receive a personalized card, which is free of cost, in 7 to 10 business days it will arrive in mail with his or her name on it. Personalized cards are re-loadable in a variety of ways. There is a monthly charge of $5.95, unless the customer makes more than 30 purchases in a month or loads the card with more than $1000 in that month.

Reloading process

The personalized card can be reloaded using MoneyPak, which is available in the same stores GreenDot prepaid is. Most stores charge $4.95 for reloading. Card users can also opt to have their payroll transferred directly to the card through direct deposit and the card acting as their checking account. Additionally, the cards may be re-loaded using ACH transfers online directly from a bank account and even from PayPal.

Reputation

As of June 2012 (over a 3-year period), Green Dot had a total of 1193 closed complaints with the BBB. Popular consumer confidence and review web sites show an unfavorable opinion of Green Dot.

As of November 2013, Green Dot has the following ratings:

Majority of unfavorable returns, listed in the sites above and other review sites, complain of Green Dot limiting access to a positive balance in the card, even though the funds have been added to the card with a cash purchase. The reviews also underscore the unwillingness or incapacity of Green Dot customer service to resolve these issues.

Security Concerns

While convenient, Green Dot's MoneyPak cards lack the security measures such as identity verification found in credit cards, limited cardholder liability, and the ability to dispute fraudulent charges so that money lost due to fraud cannot be recovered.

• In March 2010, the Better Business Bureau reported a rise in scams involving MoneyPak where unsuspecting victims would pay for items by loading a MoneyPak card, emailing the number to the "seller" only to have the "seller" drain the account and never deliver the promised product.
• In June 2011, the Better Business Bureau and the Minnesota Department of Public Safety issued warnings regarding the illegal use of Green Dot's MoneyPak cards to defraud consumers.
• In January 2012, The office of New York State Senator Martin Golden issued an alert from Con Edison regarding various scams, including "Green Dot scams."
• In March 2012, Time magazine reported on how the 419 scam was now being adapted to the relative anonymity of MoneyPak cards. The AARP Issued a warning on the rise of MoneyPak fraud in 2012 that followed the decline in MoneyGram fraud after MoneyGram was fined 18 million dollars "to settle FTC charges that it allowed its money transfer system to be used for fraud".
• In August 2012, the FBI also issued a warning that scammers were taking advantage of MoneyPak's untraceability to coerce unwitting victims into paying a "ransom" to unlock their computers infested with malware. AVG Technologies notes that in some cases (like the FBI scam), criminals are using malware to deceive victims into thinking their computer has been flagged for serious crimes, after which the relatively easy anonymity of MoneyPak cards is taken advantage of to allow for "untraceable" extortions.
• Beginning in mid-2013, Green Dot MoneyPak cards were being used to commit fraud, with persons asking callers under the guise of a customer service agent for a utility company such as a power or gas provider asking for immediate payment under threat of disconnection using a personal card or asking the caller to head to a store selling Green Dot cards and giving them the card number the funds were placed on.
• In September 2013, several Walgreens and other large chain drug stores through the United States were evacuated because of bomb threats called into the stores, with the caller asking for a 'ransom' from the stores of multiple Green Dot cards with large amounts activated using store registers which would then be placed in an unmonitored location for the culprits to pick up, or the numbers read through the phone.
• In 2015, scammers were taking advantage of Green Dot cards when filing false income tax returns using compromised Social Security numbers. The criminal opens a Green Dot account in the victim's name, making that account the payee for a refund claimed on the fraudulent tax return. The stolen SSN is used both to file the false tax return and to open the Green Dot account, which is emptied if the refund is paid. The victim receives an unexpected letter containing a permanent (embossed with the victim's name) Green Dot card for the account, a probable indicator of SSN compromise and attempted fraud.

References

1. ^ ^{a b c} Jannarone, John (March 1, 2013). "Rebound May Be in the Cards for Green Dot". The Wall Street Journal (paper). p. C8. 
2. ^ "Green Dot Gets $20M". 
3. ^ "Discover Shutdown Page". 
4. ^ "Walmart to begin offering checking accounts". 
5. ^ "Green Dot products are available at over 50,000 retailers nationwide.". 
6. ^ "Reload with MoneyPak". 
7. ^ "Green Dot - Add Funds-Direct Deposit". 
8. ^ "Green Dot - Online reload from a bank account". 
9. ^ "Yelp". Retrieved 13 November 2013. 
10. ^ "Credit Karma". Retrieved 13 November 2013. 
11. ^ "Amazon". Retrieved 13 November 2013. 
12. ^ "Consumer Affairs". Retrieved 13 November 2013. 
13. ^ Green Dot - MoneyPak
14. ^ ^{a b} BBB, DPS warn of MoneyPak scams - BBB News Center
15. ^ City of Mill Valley : City News : Seniors Targeted with Debit Card Scam
16. ^ BBB of the Golden Gate & Northern California
17. ^ Con Edison Warns Public to Beware of Scammers | New York State Senate
18. ^ Nigerian 419 Scam Uses Green Dot MoneyPak Prepaid Cards | TIME.com
19. ^ Green Dot MoneyPak Card Scams - Wire Transfer, Prepaid Debit - AARP
20. ^ MoneyGram to Pay $18 Million to Settle FTC Charges That it Allowed its Money Transfer System To Be Used for Fraud | Federal Trade Commission
21. ^ FBI -- New Internet Scam
22. ^ New Blackhole ransomware graphic mimics the FBI
23. ^ "Con Edison Warns Public to Beware of 'Green Dot' Scams" (Press release). New York State Public Service Commission. 25 June 2012. Retrieved 20 September 2013. 
24. ^ Matesic, Emily (16 September 2013). "FBI Investigating Walgreens Bomb Threats". WBAY-TV. Retrieved 20 September 2013. 
25. ^ Connolly, Caroline (18 September 2013). "Bomb threats in Utah could be part of national scam". KSTU-TV. Retrieved 20 September 2013. 
26. ^ "Oak Creek Police Warns Residents to be Aware of Fraudulent Tax Returns" (Press release). City of Oak Creek, Wisconsin. 20 March 2015. Retrieved 23 May 2015. 

External links

• Green Dot Corporation website
• Sequoia Capital funds Green Dot

Interesting Informations

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