September 19, 2013
Prepaid debit cards have gained in popularity and usage. By the end of 2013, money placed on to reloadable cards is expected to reach $209.1 Bn. According to consumeraffairs.com there is a big issue as Walmart prepaid MoneyCards were hacked in early September, 2013. The money was transferred or was used to buy goods and services by unauthorized member/s.
The Walmart MoneyCards is a reloadable card that can be used for card purchases (wherever VISA is accepted), bill payments (power, cable, water, etc.) and direct deposit feature (employees without a bank account can use their Walmart MoneyCards to have their salaries added to the card).
Money can be loaded onto the account by cash or check at Walmart stores and Walmart MoneyCenter Express act as ATMs for users to withdraw cash at Walmart stores.
A number of people possessing the Walmart MoneyCards have reported accounts being hacked and all the money spent or used to order goods online. Walmart’s security might be vulnerable for hacking. Numerous customers complain that even after having reported the problem to Walmart through e-mail or via customer service, no action has been taken yet. They were informed by Walmart that their accounts are safe only to find out hours later that someone had ordered a ‘T-shirt’ or even a ‘mobile handset’ and it is out for shipment.
Walmart advertises their card as simple to use and easily reloadable, but as customers found out, getting their money back was not a simple task. In most cases customers were told to wait for long periods of time. Some of them were not compensated properly, and those that were, received the cash after more than 3 weeks of waiting.
A citizen of US, Michele Doston’s Walmart MoneyCards account was hacked of an amount $234 for the purchase of a steam cleaner and a gift card. She got her money back with the help of 8newsnow. The website asked Walmart if Doston could receive her money since she was a victim of cyber crime, and after reviewing her case they agreed. Once the bank confirmed with Walmart about the fraud, the bank refunded her money.
Walmart said in a statement, 'Customer privacy is a top priority to us. There are sometimes individual cases when we learn that someone has gained access to a customer's login information. To be clear, there is no indication of a breach of Walmart.com systems. In these situations, there are unrelated ways that third parties obtain user names and passwords, such as a phishing attack or by planting malware on users' computers.'
LTP View: A lot of these issues cant be blamed on the company itself. Merchant risk is reducing with the advent of new security systems. A lot of times end consumers mistakes lead to stolen passwords and identities. Opening a compromised URL or pop up are typical examples of that. At the same time, Walmart’s inability to address this issue efficiently might result in a large section of the people boycotting their prepaid debit cards and switch to traditional debit or credit cards. Negative word of mouth against Walmart’s MoneyCards is strong due to the fraudulent issues. Workers in the USA also have had issues with their wages being paid through prepaid debit cards, such hacking related incidents may force companies in USA to look at traditional checking accounts to transfer wages.