Know your rights
You have certain rights under the law or under the terms of your cardholder agreement. It’s important to know your rights and how to exercise them.
Do you know your rights?
- If an employer wants to pay your wages on a payroll card, do you have a choice?
- If your card is lost or stolen, can you get a refund for unauthorized charges?
- If the bank issuing your prepaid card goes out of business, what happens to your money?
You have the right:
To choose how you get paid
Your employer may offer to pay you on a prepaid card they choose, called a payroll card. Your employer can’t require you to receive your wages on a payroll card. The employer must also offer you at least one other way to get paid – for example, a paper check or direct deposit to an account of your choice, such as a bank account or your own prepaid card. Some states allow your employer to require that you be paid electronically, but you always have the right to choose the account where the money is sent.
To choose how you receive some government benefits
Depending on the kind of benefit you receive, you may have a choice of how you receive your government benefits. For example, for some types of government benefits, you may have a choice between receiving the benefits on a government-arranged prepaid card or directly deposited into your bank account or your own prepaid card. Other types of government benefits are only provided using a government-arranged card.
To fraud and error protection with payroll cards and certain government benefit cards
You have protections in case of an error or unauthorized transactions if you are paid through a payroll card arranged by your employer, receive certain types of government benefits through a government-arranged card, or receive any payments from the federal government onto your own prepaid card. For example, you generally can’t be held responsible for unauthorized charges or other errors on these cards, if you report them immediately. In addition, the card provider may be required by federal law to credit the disputed amount to your account while investigating the problem if the investigation will take longer than 10 business days. You should call your card provider as soon as you notice your card is missing, or notice charges you don’t recognize.
Depending on your card, you may have:
Protections for loss, theft, or errors
Depending on the type of card you get, you may have protections in case of an error or unauthorized transaction. For example, cards with a Visa, MasterCard, American Express, or Discover logo typically have some protections. Check your cardholder agreement to find out about your specific card’s terms and conditions. Effective October 1, 2017, the CFPB’s new rule will extend new legal protections to most prepaid cards.
Insurance if the bank issuing your card goes out of business
For bank accounts, if your bank goes out of business, the government guarantees you will get all of the money in your individual bank account back, up to $250,000, through FDIC (Federal Deposit Insurance Corporation) insurance. Credit union accounts have similar insurance through the National Credit Union Administration (NCUA). Your prepaid card may also have FDIC or NCUA insurance; check your cardholder agreement to find out.