The Wall Street Journal has an article (WSJ – A Push to Regulate Prepaid Cards) about the risks associated with reloadable prepaid debit/gift cards, namely that they aren’t subject to the Credit Card Act of 2009 and such cards aren’t required to offer protections against fraud. If fraudulent charges appear on your reloadable prepaid debit card, you essentially may have no recourse as any fraud protection offered is voluntary for the issuer.

What is most shocking however in this article is the report on the total size of the prepaid market – between $39 billion and $119 billion in transactions in 2007. (Seriously, a range this big makes me wonder if they have any clue as to the market size. This is like someone specifying their age as between 24 and 56 on Match.com rather than saying they are in their 40’s.) Numbers that large clearly aren’t part of the estimates of the overall “gift” card market of $90 billion/year. It is also shocking that such a large volume of transactions isn’t covered by the recent credit/gift card legislation.