Consumer complaint received 2022-02-17
Company: Netspend Corporation
State: MN
Product: Checking or savings account
Sub-product: Checking account
Issue: Closing an account
Sub-issue: Funds not received from closed account

Complaint:
Throughout XXXX, I opened various debit card accounts ( XXXX, Netspend, XXXX XXXX, and ACE Elite ), all of which used Netspend for their account services. After trying to activate my card for ACE Elite, I was notified that Netspend was closing all of my accounts. I had received no warnings during this process, and had deposited much of my emergency savings into these accounts ( totaling over {$10000.00} ), so on XX/XX/XXXX I contacted Netspend via email, to get some clarification and to see if this could be reversed. 

I received a response from XXXX XXXX on XX/XX/XXXX : " Hello my name is XXXX and I am part of the Presidents Corporate Response Team. I am contacting you regarding your account closure. 

On XX/XX/XXXX, our Risk Management Team closed your Card Account, because we identified several high risk factors associated with your Card Account. We also marked your identification information as ineligible to receive future services from any Netspend managed programs. The specific Card Account activity that triggered the closure is not disclosed to consumers for security purposes. 

We are sending you out a check for any of the remaining funds you had on your accounts. You should expect to recieve the check within 20 business days. '' On XX/XX/XXXX, I replied to that message to voice my disappointment and frustration, and to see if I could possibly be provided any more details. Here is my response from XXXX : " When the decision is made to close the account it is right in the moment that we do it and it is not planned. This is done because if we find something severe enough that it could effect the customer or the funds on the account. 

Unfortunately, we will no longer be able to provide you services with our company. We will ensure that the checks do get sent with a tracking number to ensure that you know when it will arrive. 

I apologize once again that we are unable to continue business with you. '' During this time I also sent in a complaint with the XXXX XXXX XXXX  ( complaint # XXXX ), as I felt this was a completely unfair way to treat a customer. I also expressed how I was nervous about not having access to my savings during this time. 

On XX/XX/XXXX, XXXX reached out again with an update : " Since our last correspondence through email, some information has changed as far as how we are sending your funds. When I attempted to send you out a check our Risk Department stopped the check from going out and informed me that the funds must be reversed back the depositor. This means that we are going to electronically reverse the funds back which is a faster and safe process. Please allow up to 6 business days for them to receive the funds back. '' At this point I realized that they were using the return feature used by banks for ACH transfers. Typically this is done within a few days of the original transaction, but in this case they were returning the funds months later. I later had to get things sorted out with my other bank and even my employer, who were both very confused about the situation. 

The biggest issue at this point was that at one point I had deposited {$15000.00} into the XXXX account, but had transferred much of that back to my main account. The amount in that account hadn't been returned yet, so I reached out to Netspend again to inquire about it on XX/XX/XXXX. That same day, XXXX reached out again : " So part of the funds was returned back to University of MI electronically, however the check was stopped by out Risk Department and they are declining to send the remainder funds to you. 

Because the deposit amount is larger than was left on the account we can not electronically reverse the deposit. We will need the following from XXXX XXXX : THE DEPOSITOR CAN PROVIDE NETSPEND WITH A LETTER OF INDEMNITY IN ORDER FOR US TO RETURN THE FUNDS TO THEM. THE DEPOSITOR CAN EMAIL AN ELECTRONIC IMAGE OF THE LETTER OF INDEMNITY TO XXXX OR FAX TO XXXX. REFERENCE NUMBER/ACCOUNT NUMBER MUST BE INCLUDED IN THE LETTER ( XXXX ) AND THE IMAGE MUST BE LEGIBLE. AN ORIGINAL COPY WITH ORIGINAL SIGNATURE CAN BE MAILED AND RECEIVED AT XXXX XXXX XXXX XXXX TX XXXX. 

This will allow us to legally send the funds back to them in the form of a check. '' I sent a couple of follow-up emails ( on XX/XX/XXXX and XX/XX/XXXX ) to ask for some clarification, but I never received a response from Netspend. 

I did reach out to my bank to let them know what was happening, and that I couldn't get my funds unless they sent the letter of indemnity Netspend apparently needed. After much discussion with someone from my bank, they agreed to send the letter of indemnity to XXXX, which was sent XX/XX/XXXX. 

I have received no communication from XXXX since then. However, I did reach out to their customer support for my XXXX account on XX/XX/XXXX to check the status of my funds. The representative confirmed that they had received the letter of indemnity, but were surprised the funds hadn't been sent out. It was well over 20 days, so they passed along my contact information for someone to reach out to me soon. However, I have not received any communication since this call either.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation