On January 30, 2025, New York Attorney General Letitia James announced a settlement exceeding $1 million with Netspend Corporation, a provider of reloadable debit and payroll cards. The investigation revealed that Netspend violated consumer protection laws by:
- Illegally freezing customer accounts and transferring funds to debt collectors, even when those funds were protected under New York’s Exempt Income Protection Act.
- Charging unauthorized fees on debit and payroll cards, including misleading ATM fees and other prohibited charges.
- Operating a paycheck advance program that imposed interest rates exceeding state limits, with some rates surpassing 300% annually.
As part of the settlement, Netspend will:
- Refund more than $735,000 to tens of thousands of affected New Yorkers.
- Pay over $350,000 in penalties to the state.
- Implement policy changes to comply with New York’s consumer protection laws.
Consumers with active Netspend accounts will receive credits, while those without active accounts will be mailed refund checks. This action underscores the importance of holding financial institutions accountable for unlawful practices.
If you or someone you know has been affected by Netspend’s practices, you may be entitled to compensation.
In similar cases, financial institutions have been held accountable for unlawful practices. For instance, in April 2024, Pathward Bank agreed to pay over $700,000 for illegally freezing bank accounts and transferring consumer funds to debt collectors.
Experience Matters
Sauder Schelkopf has a nationally recognized litigation practice. The firm currently serves as court-appointed lead counsel in courts across the country. The attorneys at Sauder Schelkopf have recovered over $1 billion on behalf of their clients and class members. Our firm was recognized by the Legal Intelligencer’s 2022 Professional Excellence Awards. The Legal Intelligencer’s Professional Excellence Awards honor Pennsylvania law firms and attorneys who have made a significant, positive impact on the legal profession. Our firm was named in the Litigation Departments of the Year (Specialty Area category; runner-up), an award that honors the best litigation practice in a small or mid-sized firm in Pennsylvania. This recognition was based on the firm’s 2021 litigation work and its important ongoing cases. LawDragon has recognized our attorneys in its list of the “500 Leading Plaintiff Consumer Lawyers” for 2022. This list notes: “From the opioid epidemic to toxic substances and defective products, truck accidents to wildfires and sexual abuse, these are the lawyers who stand on the front line in individual lawsuits and class actions seeking justice.” Mr. Schelkopf was named to Pennsylvania’s Best Lawyers® 2022 for Class Actions/Mass Tort Litigation. The American Lawyer named Mr. Sauder to its 2021 Northeast Trailblazers. The honor recognizes 60 lawyers who are “truly agents of change.” It “recognizes professionals in the Northeast who have moved the needle in the legal industry.” The Legal Intelligencer named Mr. Sauder and Mr. Schelkopf in its 2020 Pennsylvania Trailblazers list recognizing 31 lawyers who “have taken extra measures to contribute to positive outcomes . . . and who are truly agents of change.” The Legal highlighted the firm’s innovative work on advocacy as class counsel in large institutional sex abuse cover-ups, women’s, and children’s rights. Our attorneys have also consistently been recognized by their peers being named to Pennsylvania SuperLawyer, a distinction held by the top 5% of attorneys in Pennsylvania. The National Trial Lawyers Association has also selected our attorneys as the Top 100 Trial Lawyers in Pennsylvania.
We Want to Hear from You
If you believe you have been affected by Netspend’s practices; you can contact the attorneys at Sauder Schelkopf by filling out the form on this page.