As financial institutions look for new ways to serve customers, prepaid access cards are an emerging market. Estimates of card load volume range from $116 billion to $350 billion in 2012. The National Foundation for Consumer Credit Counseling (NFCC) 2012 Financial Literacy study revealed that 13%, or about 30.5 million Americans, use prepaid debit cards to pay for everyday transactions such as groceries, gas, dining out, paying bills and shopping online.
The evolving prepaid access card market brings with it new risks and challenges. Through BITS, the technology policy division of The Financial Services Roundtable, financial institution fraud risk management experts developed this overview of the prepaid access card market. This paper provides an overview of the different types and uses of prepaid access cards, regulations and consumer protections, risks, evolving criminal use, investigative challenges and “red flags” to assist law enforcement, financial crimes investigators, financial institutions and industry stakeholders to address fraud risks.
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