Consumer complaint received 2026-06-25 00:00:00
Product: Prepaid card — Payroll card
Issue: Problem with a purchase or transfer — Card company isn't resolving a dispute about a purchase or transfer
Company: Netspend Corporation
State: WA

Complaint narrative:
I am filing this complaint regarding Netspend 's handling of a dispute involving a cancelled purchase and a refund that was never credited to my account. XXXX XXXX XXXX XXXX I reached out to Netspend to inquire about stopping two pending transactions totalling {$880.00}, which I cancelled shortly after the purchase because I realized the online stores description of the XXXX was contradictory and I was not comfortable with the purchase. I was unable to establish contact with the merchant ( XXXX XXXX ) promptly. Although they offered a live chat option that showed they were online and asked how they could help, they would not respond to anything I asked. After several attempts, realizing it was non-functional, with no phone number provided, email remained the sole method of communication. I emailed the merchant to inform them that I needed to cancel the transaction. So, I called Netspend to stop or cancel the pending transaction, and I was advised to wait until the transaction posted and then seek a refund from the merchant, even after I informed them I wasn't comfortable with the whole transaction. The merchant subsequently confirmed the cancellation of my order and stated that a full refund had been processed. They informed me that the funds should be reflected in my account within roughly three business days. XX/XX/XXXX When the refund did not arrive after the specified waiting period, I emailed the merchant to request verification. They insisted the order was cancelled and the refund returned, providing a screenshot as proof ; however, the image merely indicated that the purchase was cancelled and unfulfilled, failing to confirm that a refund had actually been issued. XX/XX/XXXX I replied by stating that I need clarity to understand where the delay is occurring. For the merchant to provide a refund transaction number or equivalent proof of a refund transaction. They replied with- While the order has been successfully canceled, our system indicates that the automatic refund attempt failed with a 'processing_error. '' I replied by stating that I am requesting : That the refund be successfully reprocessed, along with a valid transaction reference number, or An explanation of the failure and immediate resolution of the refund XX/XX/XXXX I contacted Netspend and was informed that a dispute could be filed and that my funds would be recovered, no problemWe will get your money back to you within 10 days. The agent confirmed that there would not be a wait to receive the funds even if they needed time to investigate. She opened the claim and provided a claim number and email where we could send documentation if we wanted to. XX/XX/XXXX Proactively, we submitted all available information and supporting documentation to the dispute department. In response, we received an email notification from Netspend : " Thank you for reporting this issue. We have opened a dispute claim for you. Your claim number is -- -- -- -- and should be used for future reference. The chargeback will be submitted through the payment network within ten ( 10 ) business days to reverse the funds from the merchant. A chargeback can take up to forty-five ( 45 ) calendar days ( ninety ( 90 ) calendar days for point-of-sale or foreign-initiated transactions, or new accounts ). During this time, the payment network will hold the funds until either the merchant provides documentation to validate the transaction or the timeframe has been reached. Because this is a dispute with a merchant and does not involve an error with your account, we will not provide provisional credit or otherwise have access to the funds until the merchant dispute is resolved. '' Unknowingly and thinking this was a standard reply and had to wait 10 days to receive the credit, naively not understanding and relying upon what the representative told me on the phone that I would get my money back no problem. I decided to research on my own. XX/XX/XXXX email from merchant " We have checked the refund status for your order The record shows that we cancelled the order, and after cancellation, the funds should have been automatically refunded to your original payment account. However, it appears that your card issuer rejected the transaction, so the funds have not yet been credited to your account. Could you please confirm if your original payment method is still valid and active? In this situation, we recommend that you contact your bank or the financial institution that issued your card. They will be able to provide more details on why the transaction failed and help you resolve any issues or restrictions on your account that may be preventing the refund from being processed. '' I was sending all emails and documentation between me and the merchant to Netspend. After the 10 days, Netspend gave me an update that says- " Because this is a dispute with a merchant, and does not involve an error with your account, we will not provide provisional credit or otherwise have access to the funds until the merchant dispute is resolved or until XX/XX/XXXX '' While communicating with the merchant, I was informed that the refund attempt had failed due to a processing error. The merchant provided documentary evidence showing that a refund was attempted but failed. It identifies the transaction as a refund, shows a status of " Failure, '' and contains the error code " processing_error. I immediately submitted this documentation to Netspend 's dispute department. This evidence demonstrates that the matter is not merely a disagreement about merchandise or services. ( it never was ). The merchant cancelled the order, showing the purchase was never fulfilled, authorized a full refund, and attempted to process the refund. The issue is that the refund did not successfully reach my account. The merchant stated that- " We have checked the refund status for your order The record shows that we cancelled the order, and after cancellation, the funds should have been automatically refunded to your original payment account. However, it appears that your card issuer rejected the transaction, so the funds have not yet been credited to your account. '' XX/XX/XXXX merchant email response " We have checked the refund status for your canceled order. While the order has been successfully canceled on our end, we encountered a technical issue when attempting to process your refund. Our system is showing the following error message : * * '' Unable to refund processing_error '' * * This error typically occurs when there is an issue with the original payment card or the receiving banks restrictions. Unfortunately, because of this system error, we are currently unable to push the refund through manually from our side. To resolve this and ensure you receive your money, * * we kindly suggest that you contact your bank or credit card provider to file a dispute/claim for this transaction. * * Once you initiate this process with your bank, the funds can be recovered through their system. '' And on XX/XX/XXXX Another email from the merchant : " As we have explained, this issue stems from a problem with the original payment card or the receiving banks restrictions. We are currently unable to push the refund through manually from our side. We kindly suggest that you contact your bank or credit card provider to file a XXXX for this transaction. * * Once you initiate this process with your bank, the funds can be recovered through their system. '' After I provided this evidence to Netspend, I requested an explanation regarding the failed refund transaction and what steps had been taken to trace or investigate the refund. Netspend did not provide an explanation and continued to characterize the matter solely as a merchant dispute. No information regarding the failed refund, whether the attempted refund was traced through the payment network, or what happened to the funds, just the same redundant information of no provisional credit and need to wait until XX/XX/XXXX for the next update. I also received inconsistent information from Netspend representatives. One representative stated that no dispute claim could be found. Later, another representative located the claim and provided a status update with the same information as before. Finally, to top it off, I dont have any information about my dispute claim in my online Netspend accountit says that there are no open or resolved disputes to show. XX/XX/XXXX I received this email from the merchant : " 1. Regarding your Order our records show you have initiated a formal payment dispute ( Chargeback ) through your credit card issuer. Since a formal dispute/chargeback was opened by you, the funds are already being handled by your bank 's dispute department. 2. Our Action : We have conceded ( accepted ) the dispute. We have accepted your dispute. We have chosen not to contest or appeal this claim. By doing so, we indicate our agreement to refund the relevant funds to you. 3. Proof of Transmission : Attached is the screenshot from our payment processor dashboard showing the status as " Dispute Accepted ''. We chose not to dispute this chargeback claim and have accepted it. Banks typically require time to process and resolve chargeback disputes, and after their assessment, the funds will be returned to his account and the case will be closed. This process is beyond our participation or control. '' I sent this to netspend XXXX XXXX After many phone calls to Netspend asking to speak to someone in management, I was either hung up on, lost the call, or disconnected. Following my previous inquiries, I was informed that Netspend was awaiting action from the merchant. This explanation is problematic because the merchant has already confirmed that they conceded the dispute and authorized a full refund. Despite relaying this confirmation, I continue to receive conflicting and vague updates from Netspend regarding the status of my funds. They claimed that although they can see the merchant 's acceptance in their system, they are unable to act until the merchant releases the funds. This directly contradicts their other statement that the funds are currently being held within the payment network after being taken from the merchant. XX/XX/XXXX I asked the merchant to send an official statement per their acceptance of the dispute. This is what they sent me : " Regarding the Dispute We formally declare and confirm that we have fully accepted this dispute and have chosen not to contest the chargeback. We will not submit any further action, evidence, or challenges regarding this Please be advised that we can not provide an Acquirer Reference Number ( ARN ) or additional transaction IDs. All available information from our side was included in the screenshot provided in our previous email, which shows the status as " Dispute Accepted. Once a merchant accepts a dispute, the fund recovery process is handled entirely by the payment processor and the card-issuing bank. The timeline for the hold to be lifted and the funds to appear in your account depends on your bank 's internal policies and assessment. This process is outside of our control. Banks typically require some time to process and resolve chargeback disputes. Once the review is complete, the funds will be refunded to your account and the case will be closed. This process is beyond our control. Please be patient while your bank handles this. '' I dont know what is going on, however the merchant seems a little sketchy from the beginning, and Netspend is not providing any info or transparency either. Then a supervisor told me that the merchant has not accepted the chargeback, and they are gathering evidence. They also informed me to contact the merchant and request them to send me a check. I told them that doesnt sound right, and Im pretty sure that would be considered fraudulent in the eyes of the merchant. I couldnt believe he told me that. I provided evidence, and this tells me that the merchant gave me false documentation. This makes no sense, and they arent being transparent about anything I ask. Furthermore, when I requested the transaction documentation and specific details regarding my claim, Netspend refused to provide them, citing that it is protected private information. My primary concern extends beyond a simple failed refund ; evidence shows the merchant attempted the refund, but it failed due to a processing error and was subsequently rejected by Netspend. Netspend has failed to provide an adequate investigation into why this refund failed, whether they contacted the payment network, or what specific steps are being taken to recover my money. I am formally requesting a comprehensive written report detailing Netspend 's investigation into the unsuccessful refund transaction and clarification of the current status and location of the funds associated with this failed attempt. To specify if there was any communication with the payment network or involved processing entities, and whether a formal trace was conducted through the XXXX network. Furthermore, I request the specific evidence used to conclude that no errors occurred within my account or the payment processing system, which would go along with their stating it is not an error. I was told I would receive my money back, but they refused to give me provisional credit. I just want my money credited back into my account. Given that the merchant has already accepted the chargeback dispute ( XX/XX/XXXX ), it is now XX/XX/XXXX, and I urge Netspend to take immediate action to credit these funds to my account. This should be facilitated either through a provisional credit or the prompt release of funds currently held within the payment network ; I expect my money to be returned without further delay. To conclude, the persistent lack of clear communication, transparency, and the failure to resolve this failed refund reflect a significant deficiency in Netspend 's customer service, resulting in considerable frustration. if you would like the emails between me and netspend i can send them to you.

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