The Federal Reserve has fined Green Dot $44 million for “numerous” unfair and deceptive practices in the marketing, sales and servicing of its prepaid cards and tax preparation payment services.
Green Dot violated consumer laws, the Fed says, adding that in addition to unfair and deceptive practices, the company had a deficient consumer compliance risk management program.
For example, Green Dot failed to adequately disclose the tax refund processing fee for tax preparation services offered on a third-party website. The company also blocked access to the accounts of legitimate customers who were receiving unemployment benefits and did not have adequate policies and procedures in place to help these customers resolve these blocks.
In addition to the fine, Green Dot must engage an independent third party to strengthen its consumer compliance risk management program. develop an effective AML program; and engage an independent third party to review certain transaction activities.
Shares of Green Dot fell more than five percent in afternoon trading on Friday.
Green Dot works with big names like Apple and Walmart on their debit cards and launched its own mobile bank in 2021.
However, in 2022, the company ran into trouble, firing CEO Dan Henry after three partners told him they would not be renewing their contracts, and it got into a dispute with Uber.