Consumer complaint received 2023-07-21
Company: U.S. BANCORP
State: CA
Product: Credit card or prepaid card
Sub-product: General-purpose prepaid card
Issue: Trouble using the card
Sub-issue: Trouble using the card to spend money in a store or online

Complaint:
I tried using a prepaid gift card that my XXXX Aunt purchased for me as a birthday present. I tried using it at various online and brick and mortar retailers this month. After being unable to use this prepaid gift card I contacted the company ( US Bank and XXXX ) on XX/XX/2023. They said their records indicated the card was associated with some fraudulent activity before my Aunt purchased it and before she loaded funds onto the card. As such the company said the card is invalid and the funds my Aunt loaded on to the card are blocked. The company claimed this happens all the time and that perpetrators will leave the card at the store after they are done with it. Hence, when my Aunt purchased and loaded the card it was already bunk and her funds were essentially blocked immediately. The company said the only way a replacement card can be issued to me is if I can produce a receipt along with a drivers license and pictures of the card. I sent them my drivers license and pictures of the card but the fact that this company is making me ( the gift receiver ) produce a receipt is unacceptable. This company is basically stealing from my Aunt and me for a variety of reasons. The first is that these cards are given as gifts and marketed as being an easy way to give someone money. So why would a receipt be provided from the purchaser. The second is that this company 's policy basically puts 100 % of the risk on the gift recipient and they take zero risk when it comes to fraud. If their records could tell them the card was invalid AFTER my Aunt put money on the card then they clearly have the ability to check the card BEFORE my Aunt put money on it. Of course if they did that they couldn't block access to funds that they then profit off of. Third, neither the company that administers the card or the store that sells it is taking any liability in this situation. Again if they could tell the card was used from some kind of fraud after I called them then why didn't they stop my Aunt from using this card at purchase. Also what if the store clerk doesn't clearly state to my Aunt please give the recipient of this gift card the receipt because the company and the store will accept zero responsibility if the card does not work. If this is in fact true then a warning and disclaimer should be in bold all over every single gift card. For 100 % of the risk to be borne by the gift card receipt is unacceptable for gift cards that are blocked due to fraud that occurred before the card was legitimately purchased. Finally, for situations like mine where there is no receipt ( and no way for my XXXX Aunt to produce one ), the company provides no alternatives to getting the funds released from their block. They are counting on things like this happening so they can hold these funds in perpetuity. They should be required to have sound protections in-place so that the purchaser and gift card recipient are adequately protected. They should also have a process in place for when a receipt can't be provided to them. If they can't stop people from buying and loading lots on money onto a card that was already involved in fraud and thus bunk then they should take the hit if no receipt can be provided. How is US Bank going to protect us consumers going forward because right now their gift card policy puts 100 % of the risk on the very end user.

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 monetary relief