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Email this7:43 am
December 12, 2009
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Top It Up said
Doug said
With respect, I would request deference to my first-hand banking industry experience.
NOT a chance - the evidence is rock solid in support of the Prepaid Card terminology - your comments are nothing more than disputatious.
With respect, Top It Up, you cannot always just rely on company websites and public T&C as your supportive statements. You're inferring a lot from those sources of information. And, with all due respect, you are wrong. I know what I am talking about and have first-hand industry experience. 
Cheers,
Doug
8:37 am
December 17, 2016
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Your knowledge is dated -
Prepaid Payment Products Regulations
https://laws.justice.gc.ca/eng/regulations/SOR-2013-209/page-1.html#h-2
Prepaid cards
https://www.canada.ca/en/financial-consumer-agency/services/payment/prepaid-cards.html
Prepaid cards: rights and responsibilities
9:27 am
October 15, 2015
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I have a koho card and thought it was better then vanilla card. But it has an inactivity fee of $1.00 per month after week 13 if you don't use it in 90 days.
How do they come after you for the money if there is no money on the card?
9:38 am
December 17, 2016
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From KOHO's Cardholder Agreement -
INSUFFICIENT OR NEGATIVE BALANCE, INACTIVITY, AND EXCESS CREDIT
[...]
If there is no activity on the Card for ninety (90) consecutive days and the Balance on the Card is $0.00 or negative, we will put the Card into a suspended state so that no other transaction can be processed. Please call customer service if you wish to continue using the Card.
10:12 am
March 17, 2018
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I find these class action lawsuits are just to make money for the lawyers- the amounts paid out to individual defendants are quite minimal. eg. 25.00 to people who overpaid on bread to Loblaw, about 10-30.00 for people whose Vizio tv spied on them
10:17 am
April 6, 2013
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Loonie said
…
Life would be more pleasant if we were relieved of this responsibility. I don't think they'd sell enough of these things to make it worth their while if it were widely known what they were getting.I don't find it reasonable to keep blaming the consumer for everything that is put in front of them that they might get sucked into, although that is often a popular theme on this forum. I expect government to get rid of predatory practices like this so that I can get on with my life. …
Gift cards and prepaid credit cards do work well for what they are intended.
They are used by people who don't qualify for a regular credit card to shop online.
I certainly didn't see anything predatory about prepaid Visa card I received. I saw the monthly fee that would kick in if I didn't spend the balance within the next several months. Now, one could have almost bought a bank draft for what the card cost the sender. But, $5 to $7 isn't outrageous for the plastic Visa card, nice packaging, and the retailer's commission.
It is a balancing between the interests of the consumer and the card issuers. Card issuers (gift and prepaid credit) don't want to track the cards for years or decades. Consumers need to have ample time to spend the funds on the cards.
That's why the consumer protection laws are lenient on the prepaid credit cards that could be spent anywhere in the world. There's no reason one would need two years, three years, or even eight months to spend the funds on a prepaid Visa or prepaid MasterCard. It is not like they are preloaded with $20,000!
12:45 pm
April 6, 2013
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Top It Up said
But it doesn't change the reality of how the issuing institutions refer to and market/sell the product - they are referred to as a prepaid card as in CIBC Smart Prepaid Visa card, Mogo Platinum Prepaid Visa card, KOHO Visa Prepaid card, STACK Prepaid MasterCard card, Cash Passport Prepaid MasterCard, Canada Post Prepaid Reloadable Visa card, etc.
That's the consumer-facing marketing.
To merchants who can accept them, they are credit cards. The merchants put transactions on them as if they were credit cards. More importantly to the merchants, they pay credit card interchange on the charges to them and not the lower debit card interchange on them.
The prepaid cards are kind of a blend between a debit card and traditional credit card. The cardholder has to provide money first to the issuer as if it was a debit card. They look like a traditional credit card to the merchant who can then accept them as if they were a credit card.
1:07 pm
December 12, 2009
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Perhaps disclosure should be enhanced, or the fee should be charged only once annually, after a period of inactivity, but this isn't much different than dormant account fees banks charge. 🙂
Cheers,
Doug
3:39 am
October 21, 2013
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If they are making the merchant process them as credit cards when no credit is involved, and also charging the consumer outrageous "fees", then this is a very lucrative but unethical product for Peoples.
I wasn't keen on Peoples when I did business with them, but did enjoy the 3% TFSA rate for a few years. I wouldn't likely do business with them again. I threw out my account number, password etc. some time ago.
I hope PT loses its case but don't expect they will. There could be a settlement. If the ads I see are indicative, it seems lawyers don't take these cases on unless they think they have a reasonable chance of gain as they won't get paid otherwise.
4:01 am
February 27, 2018
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Here are some facts. (No need to report me on this post)
https://www.thebalance.com/how-does-a-prepaid-card-work-960201
Fees:
For example, the Account Now Prepaid Mastercard charges a monthly fee of $9.95, an ATM withdrawal fee of $2.50 per transaction, up to a $4.95 fee to reload additional funds to the card, $2.50 for each ACH transaction on your account, $1.50 to make a balance inquiry at an ATM and $1.00 for each monthly statement. Each time you incur a fee, it comes from your balance, giving you less remaining money to spend.
4:54 am
December 17, 2016
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@Kidd that's an extreme example of fees and I believe that's a US issued card you highlighted.
If you look at Canadian bank or Fintech issued cards the fees are pretty minimal, with some exceptions in Canada being Canada Post and maybe some others. I use a CIBC Prepaid Card where the activation fee was waived and there are NO subsequent fees.
5:21 am
December 17, 2016
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Personally, I couldn't care less about Merchant Interchange Fees - I use a Prepaid Card for my protection BUT one way or another that merchant is getting a card, whether it's a Prepaid Card, a Credit Card, or a Debit Card, so fees are inevitable at their end.
6:21 am
September 11, 2013
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Didn't know much about these products, interesting info here for me, though I'm fine without them so far.
I agree, I don't see how to apply for the Account Now Prepaid Mastercard in Canada, unless someone can provide a link - ?
It is completely ethical to bring to market a product with high fees, it's 100% consumers' (not gov't, not financial institutions, not lawyers, etc) fault if they freely purchase a card like this (as far as I know not one person has been forced to buy one of these cards) and end up not being happy with their choice.
7:19 am
March 17, 2018
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Bill said
Didn't know much about these products, interesting info here for me, though I'm fine without them so far.I agree, I don't see how to apply for the Account Now Prepaid Mastercard in Canada, unless someone can provide a link - ?
It is completely ethical to bring to market a product with high fees, it's 100% consumers' (not gov't, not financial institutions, not lawyers, etc) fault if they freely purchase a card like this (as far as I know not one person has been forced to buy one of these cards) and end up not being happy with their choice.
I have 2 prepaid credit cards with minimal fees- the Mogo card earns 1.5-3% cashback with no annual fee except a monthly Inactivity Fee of $1.99 if you haven't used your card in 365 days, but which does charge ATM fees of 1.50 domestic and 3.00 international. My other prepaid card is a Stack credit card which charges no fees including no ATM fees, and has no foreign transaction fees.
7:24 am
March 17, 2018
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Loonie said
If they are making the merchant process them as credit cards when no credit is involved, and also charging the consumer outrageous "fees", then this is a very lucrative but unethical product for Peoples.I wasn't keen on Peoples when I did business with them, but did enjoy the 3% TFSA rate for a few years. I wouldn't likely do business with them again. I threw out my account number, password etc. some time ago.
I hope PT loses its case but don't expect they will. There could be a settlement. If the ads I see are indicative, it seems lawyers don't take these cases on unless they think they have a reasonable chance of gain as they won't get paid otherwise.
I've dealt with Peoples Trust for years, ( luckily after their data breach ), and have found them easy and a pleasant experience to deal with. Unfortunately, they offer no RRSP HISA, just RRSP GIC's, and only recently have their rates become competitive again. Their best feature is no fees to transfer out registered accounts like RRSPs and TFSAs to another financial institution. Their worst feature is having to remember to transfer out their RRSP GIC to another institution before it auto renews ( or within a month after ).
1:44 pm
December 17, 2016
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Bill said
Didn't know much about these products, interesting info here for me, though I'm fine without them so far.
Yeah I used to be in that same thought channel but I seem to be purchasing more items online like advance purchase train tickets for trips in Europe as well as card present hotel payments on those same Europe trips or merchants that don't accept Apple Pay - limiting the exposure of my main cards to possible fraud - and since the card doesn't cost me anything, I say why not.
I also use the Prepaid Card for ATM cash withdrawals while travelling - just reload as needed through the bank website or APP - the reload is immediate.
8:38 pm
February 20, 2018
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Whats peeps exposure
http://www.koho.ca saw them in a mall promoting brand
11:46 am
December 12, 2009
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Bud said
Whats peeps exposure
http://www.koho.ca saw them in a mall promoting brand
Peoples Trust Company is the issuer of the prepaid credit card from Koho, Stack, and Mogo. They hold the balances and "own" the client, but the client relationship is owned by each of Koho, Stack, or Mogo. Each of them pay a fee to Peoples Trust Company for providing the servicing of the accounts and issuing of the cards. Peoples Group, the parent company of Peoples Trust, may own a minority equity investment in Stack given they've put out press releases specifically about Stack, but as yet, this is unconfirmed. It's also important to point out that while the cards are issued by Peoples Trust Company, much of the servicing is done by non-regulated Peoples Card Services L.P., which is, not specifically, a subsidiary of Peoples Trust Company (it is an affiliate of Peoples Trust in that the pair are owned by Peoples Group, which is, in turned, owned by the Triple 5 Group of Companies that owns the West Edmonton Mall and Mall of America, among other assets). By Koho, Stack, and Mogo owning the client relationship, by this I mean they could switch up card issuers and servicers and take with them their clients; Peoples could still try and retain the client by also issuing them a separate, rebranded prepaid credit card.
Hope that clarifies,
Doug
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