Pre-pay credit card rapped over fees

Wednesday, 30 September 2009 08:57

An advert failing to reveal the full fees of a prepay credit card has been banned.

The Advertising Standard Authority (ASA) today ruled an advert for the talkSPORT prepaid Maestro Card should not be aired again because it was not open about fees.

The ad claimed the card "works just like a Pay As You Go mobile phone [with] no monthly bills".

However, the watchdog revealed there are top-up fees for the card, a three per cent fee for topping up at a PayPoint or with a credit card or debit card (with a minimum charge of £1).

TalkSPORT took the line that saying the card was like a phone was just an analogy and to help listeners familiar with phones understand the concept.

The ASA ruled the claim the card worked like a pay as you go phone was "likely to mislead".

Many prepay cards on the market do have a number of charges for topping up or using cash machines.

This has led to heavy criticism of the cards for hitting the lowest income people -who are often unable to get hold of credit or debit cards - with high fees.

But without the cards they are unable to shop online or access a wide variety of services.

However, there are a number of cards on the market that do not charge these fees.

Mobile phone operator O2 recently launched a card for customers without fees in partnership with NatWest.

Escape MasterCard Prepaid Card has free top-ups with cash at Phones 4U stores, but a 99p charge for debit cards top-ups in stores or at the Post Office and a 99p charge for withdrawals at cash machines.

Virgin Money has a card with free top-ups at the Post Office or by direct debit - but charges of 2.95 per cent for transactions or withdrawals in the UK on the pay as you go card.

Consumers are advised to shop around for prepay cards looking at what exactly they need them for.

Some focus more on allowing overseas transfers and have lower fees in this area, while others offer holiday money options that are cheaper to use than a debit or credit cards.

Further cards are aimed at teenagers or those looking to budget day-to-day spending.

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