Schoolteacher Cheryl Cooper learned a tough lesson about the Vanilla Visa card she recently got as a gift.
“I have a useless piece of plastic and I hang onto it to as a memento,” Cooper tells NBCLA.
When she got the $50 card, she tried to use it at a CVS. “I was planning on buying some supplies for my classroom, and lo and behold it was declined, and the reason it was declined, they said ‘account not found,’ there was no such account,” Cooper tells NBCLA.
It was declined again at a Valero gas station, and Cooper isn’t alone in her frustration.
Consumer websites are full of complaints about the Vanilla Visa and other prepaid debit or gift cards. Many of the posts by consumers on these sites say the cards are “rejected everywhere,” “every time.”
“These new cards do not have the same protections that a Visa debit or credit card has,” says professor Robert Manning, of the Rochester Institute of Technology. He is one of the nation’s leading experts on credit cards.
“If you’ve got a damaged product and you want to return it to the merchant, where Visa would immediately credit your account, you’re not going to have that protection,” says Manning.
In fact, Visa tells NBCLA it doesn’t even handle customer service for these cards. The cards are issued by various banks, which set the rules for their use.
When Cheryl Cooper’s Vanilla Visa was declined, she called the 800 number on the back of her card. But every time she called there was no option to speak with a live person.
Cooper’s card says it was issued by Silverton Bank of Atlanta. The bank failed last year and is now operated by the government. Neither the bank nor the FDIC could tell us why her card is being declined.
We found other issues with these cards too.
“Tremendous amount of fine print on these products,’ says Manning.
With many of these types of cards, if you use them at a restaurant, you might get charged a temporary 20% pre-authorization fee.
You can’t use many of them at ATM’s like other debit and credit cards, bacuse of anti-money laundering regulations.
Your card may be declined at a gas pump if you don’t have a minimum balance on it. Vanilla Visa tells us this problem can be avoided if you pay at the cashier instead of at the pump.
So how do you avoid all these issues? Dr. Robert Manning says instead of giving a prepaid card as a gift, consider giving cash or a check.
As for Cheryl Cooper, her story has a happy ending. Her mother went back to the store where she bought that Vanilla Visa card for Cheryl and told them NBCLA was looking into the problem. She says the manager immediately gave her a full refund.
Since we first reported this story, we have finally been able to speak with representative of Vanilla Visa. They tell us Cheryl Cooper's case is an anomaly because the card she received was a replacement for one previously lost in the mail and there was confusion with activating the card.
The company also tells us, Cheryl's card shouldn't have said Silverton bank on it, that it was actually backed by Bancorp Bank and that Cheryl's card was printed on an old card in error.
As for the issue of customers having problems getting a live person when they call Vanilla Visa. The company tells us because of this report, they have revamped their 800 number system to make it easier for customers to reach a live person.
The company also has setup a special toll-free number which will connect customers having problems directly with a live person. That number is 877-770-6406.
Vanilla Visa stands by their product and tells us their card is better than cash because it's more convenient, more secure if it's lost or stolen and allows consumers to keep track of spending.