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2 posts categorized "prepaid cards"

June 17, 2014

There Are No "Quiet Exits" in the Payment Game

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by Ron Daly

By now, you've likely heard the news that the Approved Card, the prepaid financial product promoted by none other than Suze Orman, is shutting down. You probably remember a few years ago when much ruckus was raised over Orman's endorsement of this high-fee product.  Now, Orman is seeking to exit the payment space "quietly", according to the New York Times.

Trouble is, there's no such thing as a "quiet exit" in this space. Who would expect silence after such a loud and hotly-debated entrance? Suze claimed her card would be the beginning of a revolution. 

From The Daily Beast

Even so, the Money Navigator flap was a minor blip compared to the storm Orman ignited in January 2012. That’s when, declaring a “financial revolution,” she launched the Approved Card, a prepaid debit card backed by the Bancorp Bank, the top issuer of prepaid cards in the U.S. “You can always bank on me,” Orman announced during the accompanying promotional blitz.

Well, it would appear the revolution has come to a bitter end. And as far as "always banking" on Orman? That's officially false as of July 1, when the cards will stop working. As for all the critics Suze called "idiots" and publicly shamed for questioning her judgement, I imagine they feel vindicated when they read these words in the New York Times

It is unclear exactly why Ms. Orman’s venture is ending. A spokesman for Bancorp Bank, which ran the back-end systems for Approved, declined to comment, citing a policy of not making statements about its partners. Ms. Orman could not be reached for comment. The website for the card does not appear to have been updated recently, and as of Monday night, had no mention of the card’s status.

If that wasn't enough, my attempts at reaching the Approved Card website turned up an error page. Seems as though someone doesn't want to say anything...which says a lot.

I'm not trying to diminish Ms. Orman's record as a financial adviser; many people adore her and trust her advice implicitly. But I imagine she's going to have a heck of a time explaining what went wrong with the Approved Card to its now-unbanked users...if she bothers explaining at all.

There are no "quiet exits" in the game of payment and finance. If you don't want to do the talking, don't worry - the consumers will do it for you. 

August 07, 2013

Why didn't WE think of that?

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by Ron Daly 

What would you do if you found out your parents (or grandparents) had given away five thousand dollars to a fake charity scam?

Would you be angry? Sure, I bet you would. You'd be angry at the fake charity. These people play with elderly people's sympathies and their sense of compassion. It's just horrible. Makes me angry thinking about it...

You might even tend to be a little disappointed at your older-folks for falling for it, even though that's blaming the victim. They only want to help people and find time to chat with a friendly face or a warm voice on the other end of the phone. You gotta give them a break.

Would you be mad at the bank or credit union that let the charges go through? Well, they don't have any way of knowing which charges are legitimate. Right? 

Thanks to a Gen-Y wunderkind, these crummy charges can be avoided. 

Kai Stinchcombe, a "serial entrepeneur" who's well under 40, create True Link, a prepaid card that seniors can use in conjunction with a checking account or pension fund that alerts close family that charges are being made and can allow those charges to be preempted via text message alert. That way, a group of weirdos pretending to be the Lion's Club charity drive can't make off with grandma's life savings. Stories like this one don't have to happen anymore to elderly folks who may be suffering from dementia or Alzheimer's, or are just a bit too trusting.

It's a genius idea. It will likely prevent hundreds of thousands of dollars, maybe even millions, from being slipped out of the hands of trusting senior citizens. Heck, with just a bit of tweaking, this could be the solution for "grey charges" - you'd be the person authorizing every withdrawal. 

Here's my question: Why didn't WE think of that?!

We have the technology to alert people directly when a transaction happens. We know that elder abuse and fraud happen every day. We know that there are concerned sons, daughters, nieces, nephews, grandkids and great-grandkids that want their grandparents to be okay and retain their independence. We know all of that.

So why did it take an outsider to get us here?

And what is the deal with this whole "prepaid card" thing? Are our cards not good enough? Yeah, a $20 annual fee for the ability to keep your parents and grandparents from selling their lives away is a meager sum, when you think about it. But couldn't we be there with a free card? Or a program that ties into a checking account that elderly person might already have, avoiding any do-si-do between card provider and source? 

When I hear people talk about "innovation", I wonder how many people are just staring at a poster on the wall of a guy holding a lightbulb. Seems to me innovation is when you realize people need something and the thing you give them to fill that need is not what they expected. People needed a faster way to pay without using credit so we made debit cards. People wanted to manage their finances more closely so we created online banking and bill pay. People needed to do business on the go so we got the smart phone. All the stuff we count on to make life easy once seemed ridiculous, just "Da Vinci sketches" of weird helicopters that would never prove useful. And now, we have it. 

As you read this, someone's working on the next iteration of the True Link card. Does it also include check fraud prevention and free checkbooks? Does it include learning materials for people with elderly parents, alerting them to scams that most seniors with the card are encountering? Does it share declined purchases in a database, identifying trends? Does it call the cops on those scammers and put them out of comission for good?

Why don't you think on that?

Do you know of any cards or programs that exist specifically for seniors in the credit union world? Let us hear about them in the comments section.