Can I block prepaid American Express Cards?

A merchant asked if we can block prepaid American Express cards for card not present transactions. The logic is that customers are using regular credit cards for single purchase transactions, but using a prepaid card for recurring billing transactions.  This is a huge problem for membership clubs, infomercial companies and any time that a customer makes multiple payments for an item or service that they receive the benefits for upfront.

For service companies, it’s often months before they realize they can no longer charge the customers card. For informercials, the product goes out, but the merchant only has one payment. Both are getting ripped off by customers who don’t complete payments per their agreement because the prepaid card has no money left on it.

Currently we’re not aware of any service provider who can support prepaid Amex card blocking AT THIS WRITING because American Express will not release the BIN number details needed to effectively achieve this. There are ways to minimize prepaid card issues though. Using a scrubbing service or a hosted payment processing platform, merchants have choices for accepting and blocking specific payment types. Unlike post- sale solutions, we kill the sale immediately, forcing the customer to choose another card. Merchants can block the majority of other prepaid cards with this service.

For those seeking to buy a list of prepaid card bin numbers, no, we do not offer that and never will.

Virginia house considers ban accepting prepaid debit cards

January 23, 2009 RICHMOND, Va. – Republican legislation banning online campaign donations by prepaid credit cards in Virginia has cleared a House committee.

Unlike traditional credit cards, prepaid debit cards are basically anonymous ways to make purchases or donations. Virginia and others have chimed in that their use could result in donors passing campaign limits since there is no way to know where the money comes from.

Only five states have no limit on campaign contributions.

Can I block prepaid cards from ecommerce transactions?

Yes, you can block prepaid debit cards from ecommerce, MOTO, and other transactions. Specific technology is required to identify what type of card is being presented. It is not something that can be detected by credit card terminals. The transaction needs to be identified at the gateway before your system actually makes the authorization.

That technology is not currently offered by most gateways, including the popular big name gateways.

Here are some reasons why you would want to block prepaid debit cards:

  • If you offer recurring billing and you ship the merchandise with a small initial payment, you may not be able to collect later or get your product back.
  • If you accept political donations, there is no way to identify the donor.
  • Webmasters can reduce headaches of collecting payment on recurring web host billing.

I offer this prepaid debit card blocking gateway service to customers processing more than 50,000 transactions or $5,000,000 per year.

Online Marketers of Prepaid Debit Cards settle with FTC

Online Marketers of Prepaid Debit Cards to Subprime Consumers Will Pay More Than $2.2 Million to Settle FTC Charges

An operation marketing Visa- and MasterCard-branded prepaid debit cards to subprime consumers has agreed to settle Federal Trade Commission charges that it made unauthorized debits from consumers bank accounts and engaged in deceptive marketing practices. The settlement requires the defendants to pay $2,258,258 for consumer redress, plus the proceeds from the sale of an automobile. In addition, one of the defendants, Dale Paul Cleveland, must pay taxing authorities an additional $667,288.

According to the FTC’s complaint, filed in federal court in July 2007, the defendants marketed bank-issued prepaid debit cards under a variety of names through Web sites and pop-up and e-mail advertisements that directed consumers to sites for the individual cards (including Acclaim Visa, Impact Visa, Sterling Visa, VIP Advantage Visa, Vue Visa, Elite Plus MasterCard, Impact MasterCard, Secure Deposit MasterCard, VIP MasterCard, and Vue MasterCard). They also marketed unrelated short-term loans on Web sites such as and The complaint alleged that, among other things, the defendants debited, without authorization, a $159.95 application and processing fee from consumers bank accounts, including from consumers who did not submit an online application for the prepaid cards or who had applied for an unrelated short-term loan.

Under the proposed settlement, defendants EdebitPay, LLC, EDP Reporting, LLC, EDP Technologies Corporation, Secure Deposit Card, Inc., Dale Paul Cleveland, and William Richard Wilson, all located in Los Angeles, California, are prohibited from debiting a consumer’s account or causing billing information to be submitted for payment without first obtaining the consumer’s express informed consent. The defendants are required to clearly and conspicuously disclose the costs to obtain and use any prepaid, debit, or credit card, and that the defendants will use consumer’s personally identifiable information to impose such costs, in close proximity to any instruction to provide such information and to statements such as No Annual Fees or No Security Deposit that represent that a card can be obtained free, without obligation, or at a reduced cost.

The order also prohibits the defendants from misrepresenting any fact material to a consumers decision to apply for or purchase any product or service. In addition, it requires the defendants to clearly and conspicuously disclose certain material information before a consumer applies for or purchases any product or service, such as any charge that will be assessed against the consumers bank account; any method that will be used to debit the account; that the consumers personally identifiable information will be used to debit the account; that such information will be sold or transferred to third parties for marketing purposes; the material attributes of the product or service being offered; and, if a representation is made about a refund or cancellation policy, a statement of all material terms and conditions of the policy.

The order also requires the defendants to investigate and resolve, within 30 days, any consumer complaint or refund request, and to take reasonable steps to monitor and ensure that the defendants agents, representatives, employees, independent contractors, and marketing affiliates comply with the order.

The Commission vote to authorize staff to file the stipulated final order was 5-0. The order was filed in the U.S. District Court for the Central District of California, and was entered by the court on January 17th.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

Copies of the order are available from the FTC Web site at and the FTC Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click

Frank Dorman
Office of Public Affairs
Raymond E. McKown
FTC Western Region – Los Angeles