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The Bancorp Bank, one of the largest prepaid card issuers, agreed Wednesday to pay a $2 million penalty to the Federal Deposit Insurance Corporation to settle charges that the bank charged higher fees than it disclosed to customers for nearly four years.
The bank issues prepaid cards on behalf of non-bank companies such as those that provide internet and mobile banking.
As part of the settlement, The Bancorp Bank is to prepare a restitution plan and pay restitution of nearly $1.3 million to about 243,000 consumers who were charged transaction fees that were more than the bank disclosed. Consumers who are eligible for a payment under the settlement aren’t required to take any action to receive it.
The bank has 90 days to reimburse consumers after its restitution plan is approved by the FDIC.
The agency found that the bank overcharged transaction fees for some signature-based transactions, those not requiring a personal identification number or PIN, on some cards, including the bank's Excella Visa Prepaid Debit Card.
As the issuing bank for the prepaid cards, The Bancorp Bank was responsible for ensuring that these programs were operating in compliance federal laws, the FDIC said.
