When a prepared credit card system goes down, millions of unbanked American lose their ability to access funds needed to pay bills, buy groceries, and make other purchases. This scenario was illustrated last month when customers using Walmart-branded Green Dot prepaid debit cards said they had been stranded without their funds for several days, and in some cases weeks. Now, a pair of lawmakers wants to understand the debacle better and work to prevent something similar from happening again. 

Senators Sherrod Brown (OH) and Bob Melendez (NJ) sent a letter [PDF] requesting information from Walmart, Green Dot, and MasterCard related to the system outage that prevented customers from withdrawing cash from ATMs, checking their account balances, or making purchases in mid-May.

The lawmakers are seeking details on how the problem happened, how many customers were affected, what reimbursement the companies will offer to harmed consumers, and the steps the companies are taking to prevent a similar slowdown in the future.

The Senators pressed the companies to provide a detailed timeline of the disruptions and to distinguish the circumstances of the glitch from the problems that RushCard experienced last year.

The companies were also urged to provide information on how they would enforce forced arbitration clauses in their user agreement where it involves the glitch.

The issues began when card holders began to experience interruptions with their cards.

A Facebook group, “Walmart Money Card Exodus,” was created as a place for customers to detail their continuing problems for the card during the glitch.

“So I woke this morning, checked my balance and it says my balance is $0.00 called the 800 number says my account was negative $42.89, talked to a rep and he said I had $289.62, but I cannot use my card until issue is fixed,” another card user said.

“Going on day 4 soon of no money,” the poster said. “Finally was able to get someone on the phone after trying since Monday. All he could say was he was sorry and that the system update failed and caused a lot of people’s card not to work.”

Users in the group say they plan to leave the prepaid card behind if Walmart and Green Dot do not “compensate their customers for misinformation about being able to access their own money for nearly nine days.”

Green Dot blamed the issue on a technical glitch and later said the interruption was due to a slowdown in transaction processing by its payment processor, MasterCard.

About a week after the glitch began, Green Dot told customers it would be “putting extra money on your card as our way of trying to apologize and make things better.” It was unclear how much the company added to users’ accounts.

The lawmakers — Brown, the ranking member of the Senate Banking Committee and Mendez, a member of the Banking panel — noted that with over 4.5 million active Green Dot card users, the issues could have created a financially devastating situation exceeding a previous outage by RushCard.

RushCard recently entered into a settlement agreement in which the company will pay $19 million in compensation for consumers who were affected by the weeks-long outage.

“These service interruptions are a clear indication that more oversight and consumer protection is needed in the prepaid card market,” the senators wrote in the letters.

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