netspend corporation distributor summary...

NETSPEND CORPORATION

Distributor Summary Handbook

Prepaid Reloadable Card Product Behind – the – Counter

July 2006

NetSpend Distributor Handbook – July 2006 Confidential - Not for Distribution 2

Introduction

The purpose of this handbook is to help give you a better understanding of the NetSpend prepaid reloadable

card product. The information about the card will assist you in selling the prepaid reloadable card effectively

with knowledge in the Risk Management and Compliance areas. We have also provided information on partner

support through our Client Services department. Our Marketing Department has compiled some information on our prepaid reloadable card product for your

knowledge. This information does NOT apply to our gift card product. This information will give you a better

understanding of the products and how to sell them. Also provided are card features and benefits along with a

short description to each, defining how each feature and benefit is useful. In addition to this, there is also a

section to help you identify all cards offered by NetSpend that you can reload in your store even if you don’t sell

them.

Our Risk Management and Compliance Departments have described some policies on load limits, acceptable

card purchases, required ID information, recordkeeping, suspicious activity processes, and inventory control.

Provided are full descriptions in each area. You will also find samples you can use for logging inventory as well

as filling out appropriate monetary forms. This section will guide you on NetSpend’s Risk Management and

Compliance requirements.

Our Client Services Department has provided a brief description of their services and ability. In this handbook,

you will find a section detailing the functions of Client Services, including fulfillment of supply requests,

adjustments, training, transaction verification, and general questions. This information will assist you with any

questions you may have related to these services.

CONFIDENTIAL NOTICE: This communication and any documents attached to it are intended only for the use of the person or entity to which it is addressed. It contains information that may be privileged, confidential and exempt from disclosure under applicable law. If you are not the intended recipient(s) of this communication, you are hereby notified that the copying, distribution or other use of this communication is strictly prohibited. If you have received this communication in error, please notify the sender immediately by electronic mail and destroy all forms of this communication. NetSpend Distributor Handbook – July 2006 Confidential - Not for Distribution 3

About the General Purpose Reloadable Card

What is it?

Prepaid means that it works with the cash amount loaded on the card. There is no need to worry about paying interest charges or bills. It offers the security of not having to carry large amounts of cash with the convenience and protection of paying with plastic.

Features and Benefits:

Instant Issue A temporary card with a Visa®/MasterCard® logo. This card can be used for PIN and signature transactions. Use it immediately after activation.

Universal Acceptance Use the card at department stores, gas stations, grocery stores, restaurants and even places where cash can't go, such as bill payments over the phone, catalogue and internet shopping. Over 30 million merchants worldwide accept Visa®/MasterCard® debit cards. Access to Cash Worldwide Over 1 million ATMs worldwide accept Visa®/MasterCard® debit cards. Have access to your cash wherever you go. PIN is required for ATM use. Free Account to Account Transfers Customers can transfer funds from their NetSpend account to any other NetSpend account for Free simply by logging on to their account at www.netspend.com or by calling NetSpend at 1-866-NETSPEND. FDIC Insurance All cardholder accounts are insured up to an aggregate of $100,000. Funds are insured by the issuing bank listed on the back of the prepaid reloadable card. 24/7 Account Access Access account balance, transaction history or report a card lost or stolen online or via a toll free number 24 hours a day. 7 days a week at www.netspend.com. Additional Cards Enjoy the added benefit of having up to 3 debit cards on each account for friends or other family members. All-Access Wireless Alerts A FREE service that allows you to always know your balance or be aware of any transactions made on your card with text messages or email sent to your mobile phone or email address. E-LoadsLoad a card from a credit card (instant) or a bank account (3 to 5 days) Pay-As-You-GoThe fee plan option for limited-use cardholders. Only pay when you use the card. FeeAdvantage™ A great money saving, optional fee plan, that allows cardholder to make UNLIMITED monthly signature or PIN purchases for just $9.95 a month.


http://www.netspend.com/

http://www.netspend.com/

The customer chooses the plan that is best for them during activation:

How to Identify a NetSpend Card

In addition to loading the prepaid card you sell in your store, you can also load any of the other cards that NetSpend offers. To identify a NetSpend card, simply look on the back of the card for the NetSpend logo:


Sales Tips and Signage

Proven Sales Tips

• Spark some interest o “Have you heard of our new Visa®/MasterCard® Prepaid Card?” o “Do you have a Visa®/MasterCard®?” o “Do you want a safer way to carry your cash?” o Pass out a flyer at the beginning of a check cashing or other type of transaction for a customer

to review while they are waiting.

• Assume the sale o “Want to load your cash on a prepaid card? It takes less than a minute.” o “You have already been approved for your own Visa®/MasterCard®, and you can walk out with

one today. Would you like me to process one for you?”

• Set goals o How many cards did you sell last month? How many did the store sell? Use last month’s

performance to set a goal for this month. o See how much you can improve!

Display your NetSpend Signage

• Make sure all the material is up and in good condition in your store • If you need to replace any material or request additional pieces, please call Client Services at: 1-866-397-

5643 .


NetSpend Risk Management / Compliance Policies

Overview This section outlines the distributor responsibilities with regards to Risk Management policy in the sale or loading of NetSpend card products: The Distributor is required to adhere to the following policies:

1. Multiple card purchased must be facilitated through NetSpend Customer Service.

2. ID checks must be fulfilled in line with NetSpend policies.

3. Prepaid reloadable card sales require a $10 minimum load.

4. Loads are restricted to a daily load limit of $2500 on temporary prepaid reloadable card (pre CIP*) and $5000 on permanent prepaid reloadable card (CIP* passed).

5. Currency Transaction Reporting.

6. Reporting unusual or suspicious activity.

7. Proper inventory control practices must be in place for instant issue and ATM cards as established by NetSpend policies.

8. Prepaid reloadable cards cannot be sold to non-employee minors.

9. Customers’ cannot purchase NetSpend prepaid reloadable cards for someone else or in someone else’s name.

10. An information packet must be given to all customers’ who purchase a NetSpend prepaid reloadable card.

The subsequent section further details the above policies.

* CIP: Verifying the identity and key facts about the customer. .


The Distributor is required to adhere to the following policies: 1. Multiple card purchases must be facilitated through NetSpend Customer Service.

Distributors are authorized to sell only one prepaid reloadable card per individual. Distributors can refer customers who want to purchase multiple cards to NetSpend at 1-86-NETSPEND for inquiries on this policy. There is a limit of three cards or three accounts per individual.

2. ID checks must be fulfilled in line with NetSpend policies.

For U.S. citizens, NetSpend requires that a valid government-issued, photo ID and customer name with address be presented at the time of card purchase for the All-Access prepaid reloadable card. Social Security Number must also be provided. Additionally, Name, Address, SSN information must be transmitted to NetSpend whenever possible. For non-US citizens, a valid form of foreign government ID, including but not limited to passport, Matricula Consular, or voter registration card is required. A copy of this I.D. must be faxed to NetSpend. Distributors are encouraged to facilitate providing the I.D. copy to NetSpend at the time of card purchase through use of the “Alternative I.D.” fax form provided (see NetSpend Logs/Forms, templates RM006E & RM006S). Customer has 30 days from date of purchase to provide NetSpend a faxed copy of their I.D. Failure to send it within the 30 day time frame will result in the account being blocked. Additionally, NetSpend requires that an ID be checked in the case of loads >$500. In all load cases, NetSpend does not permit the loading of cards by a non-cardholder. The ID must match the name on the card.

3. Reloadable card sales require a $10 minimum load.

As part of the card sale process, the customer must load $10 at a minimum. This is primarily enforced by the system. However, for the limited cases where this is not systemic, the distributor must enforce this minimum limit by policy.

4. Loads are restricted to a daily load limit of $2500 (pre-CIP – Temporary Card) and $5000 (CIP passed – Permanent Card). Maximum account balance cannot exceed $10,000.

In most cases, this is enforced by the system. However, for the limited cases where this is not automated, the distributor store must limit daily loads to $2,500 per account.

5. Currency Transaction Reporting Please be aware that loads of more than $10,000 require filing a Currency Transaction Report (“CTR”). In addition to filing the form per their internal AML policies and procedures, Distributors are to fax a copy of the CTR (template RM004) to 512-692-2980 to the NetSpend Fraud Control division. A sample of the CTR is included in this manual.

6. Reporting unusual or suspicious activity.

When a Distributor witnesses unusual and/or suspicious behavior involving a NetSpend Prepaid debit cardholder and feels that the account should be reviewed by NetSpend in order to determine whether or not the activity warrants a referral to the issuing bank, template C001 should be used. Sample of the template is included in this manual.


In addition to the above, loads in excess of $2000 and suspicious require the filing of a Suspicious Activity Report. A transaction must be reported if an agent knows, suspects or has reason to suspect that the transaction (or a pattern of transactions of which the transaction is a part):

• Involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity, or is

• Designed to evade the requirements of the Bank Secrecy Act, whether through structuring or other means, or

• Serves no business or apparent lawful purpose and the reporting business knows of no reasonable explanation for the transaction after examining all available facts.

Please refer to your company’s policies and procedures regarding the identification and reporting of unusual and/or suspicious activity.

NETSPEND RECOMMENDS FILING ON A SUSPICIOUS ACTIVITY OF ANY AMOUNT. See attached for Suspicious Activity Report (template RM005). In addition to submitting the form per their internal AML policies and procedures, Distributors are to fax a copy of the SAR to 512-692-2980 to the NetSpend Fraud Control division.

7. Proper inventory control practices must be in place for instant issue and ATM cards as established by NetSpend policies.

NetSpend requires that distributors keep the Instant Issue card stock in a secure location. Access to these cards must be restricted to limited authorized personnel. The distributor should maintain a daily and monthly log, which would record the type of card product, date/time of card stock access, amount being added/removed from inventory, current balance of cards, and signatures of individuals accessing the card stock. The distributor should undertake end of day reconciliation of cards to ensure all cards accounted for, including cards sold and any shrinkage that may be experienced. This policy also applies to prepaid reloadable cards and other instant issue NetSpend products. Inventory logs are attached. Please see templates RM001, RM002, and RM003.

8. Cards cannot be sold to non-employee minors.

Distributors can only sell prepaid reloadable cards to applicants that are 18 years of age or older. This policy is waived for distributor employees who will default to general distributor employee policy. Non-employee minors who would like to purchase cards must be directed to NetSpend at 1-86-NETSPEND.

9. Customers’ cannot purchase prepaid reloadable cards for someone else or in someone else’s name.

Distributors are only authorized to sell cards in the name of the person purchasing the card. Only the name on the I.D. can be printed on the card. If a customer requests a card with a Business name please direct them to NetSpend at 1-86-NETSPEND.

10. An information packet must be given to all customers’ who purchase a prepaid reloadable card.

The information packet contains NetSpend’s Terms and Conditions for card usage. On information packet must be given to all customers who purchase a NetSpend card.

NetSpend Compliance Monitoring NetSpend will monitor adherence to these Risk Management and regulatory Compliance policies and will contact the distributor in the event of non-compliance with any of the above policies. Distributors must immediately correct non-compliance actions. In the event of continual non-compliance with NetSpend Risk Management policy, the Distributor store will be placed on warning status and may include temporary suspension of NetSpend activity until improved procedures are demonstrated to NetSpend.


NetSpend Logs and Forms This section includes templates of the following logs:

A. Inventory Logs (templates RM001, RM002, and RM003) B. Currency Transaction Report (template RM004) C. Suspicious Activity Report (template RM005) D. Unusual/Suspicious Activity Referral Form (template C001) E. Alternative I.D. Fax Form (templateRM006E and RM006S)

Inventory Audit Logs

It is extremely important that stores follow the prepaid reloadable card mandatory card storage and sales tracking requirements. Your corporate offices have agreed to follow these requirements. You must keep close track of all cards sold or destroyed daily in the logs provided to you. All prepaid reloadable cards and gift cards should be stored safely and counted daily as if they were cash because they are as valuable as cash!

Important Instant Issue Card requirements: Store cards in a safe, controlled environment with limited access, such as a locked cabinet You must fully fill out your logs!

• All unsold cards must be counted and recorded in your daily log at the close of each business day Prepaid reloadable Visa/MasterCard Gift Card Visa/MasterCard

• All destroyed cards must be recorded in the destruction log provided. • You must record the number of cards in inventory to your monthly log at the first of each month • All card logs should be maintained for a minimum of 18 months. Risk Management will be requesting

that logs be faxed for auditing purposes. Counting Your Instant Issue Card Inventory When inventory is counted at the end of each day, two (2) employees must initial the log confirming the recorded number is correct. The store manager must perform the end-of-month card count. The manager must sign and confirm that the count is accurate, and report any discrepancies or errors in the daily logs from the month. Destroying Spoiled Cards Spoiled cards are Instant Issue cards that are damaged, voided, unable to be loaded, or are in any way unusable. When destroying spoiled cards, the destroyed card must be shredded. Just cutting the card in half is not enough. Each card that is destroyed must be recorded in the destruction log. Two (2) employees must be present when destroying spoiled cards and both employees must initial the log. Reporting Discrepancies The end-of-day balance of cards sold, spoiled cards destroyed, and remaining cards in inventory should equal the balance at the beginning of the day. If there is a discrepancy or if you find cards are missing, you must contact Netspend immediately. Contact your client services representative at 1-866-397-5643.


STORAGE OF PREPAID NON-PERSONALIZED CARDS

Requirements:

1. The prepaid cards should be stored in a controlled environment with limited access.

2. Prepaid cards should be inventoried at the time of receipt and managed under a dual controlled environment. (2 Employees should be assigned to audit Instant Issue cards in the case of only 1 employee per store, then a manager can audit on a monthly basis or as needed.)

3. The prepaid reloadable card should be inventoried on a daily and monthly basis. Unused card products come in a manner that would detect tampering to help detect any fraudulent activity. (Cards will be in sealed bundles of 25)

4. A daily balance equaling number of card products, card products used, card products spoiled (damaged, voided, etc.) and remaining card products should balance to the beginning number of card products at the end of each day. The process should be performed under dual control and documented with dual signatures, date and time of inventory.

5. All spoiled prepaid reloadable card products should be rendered useless under dual control. The following guidelines should be followed for card destruction:

a) Spoiled cards are to be destroyed (shredded) immediately on determination that the card product is no longer of a business use.

b) Both Employees destroying the cards are to ensure that all images and cardholder data is rendered unusable/unreadable. It is not acceptable to cut cards in half and dispose of them in the trash.

c) The two individuals shredding the cards are not to leave the area until everything has been destroyed.

d) Prior to leaving the area, both individuals are to ensure that all cards have actually been destroyed.

e) A destruction document/log is to be immediately completed upon the counting and destruction of spoiled cards. This document/log is to be maintained for a minimum of 18 months with the card stock.

• The destruction log is to include as a minimum:

1. The date of destruction, the date of the spoilage, the number of each card type(s) being counted/destroyed and initials/signatures of both employees counting/destroying the cards.

2. If an account number or cardholder name can be identified, this data is to be included for audit purposes. The account number should be truncated if possible; i.e., last four or six numbers only

6. Inventory control logs should be kept according to the one attached and retained for 18 months.

7. Inventory discrepancies should be immediately reported to management and a reconciliation of all card products should begin.

Thank you for your ongoing partnership and support. If you have any questions, please call client services at 1-866-397-5643.


NetSpend Logs

(Template RM001)


(Template RM002)


(Template RM003)


Currency Transaction Report (SAMPLE PAGE)

Complete document available at http://www.fincen.gov/fin104_ctr.pdf

(Template RM004)


http://www.fincen.gov/fin104_ctr.pdf

C. SAR-MSB (SAMPLE PAGE) Complete document available at

http://www.fincen.gov/f902256.pdf

(Template RM005)


http://www.fincen.gov/f902256.pdf

Unusual/Suspicious Activity Referral Form

Please use this form for reporting any unusual or suspicious activity you feel you may encounter with a

NetSpend Prepaid Reloadable cardholder.

Proceed with the following:

1. Please fill out all information you may have pertaining to the customer.

2. If you have any questions, please call Netspend Fraud Control Division at 1-866-397-5639.

3. Fax this completed form to NetSpend Fraud Control Division at 512-692-2980.

Customer Name:

Address:

City State: Zip:

Phone: Date of Birth:

Occupation

Total $$ amount involved:

Account Number Dollar Amount

$

$

$

$

Description: (Please explain the situation that is being referred)

(Template C001)


FAX COVER SHEET Non-US Customers with Foreign ID

Attn: Store Teller/ NetSpend Customers Non-US citizens who do not have a Social Security Number, but do have a valid foreign government-issued ID, must provide NetSpend with a copy of the ID within 20 days of the prepaid card purchase. Valid forms of foreign government IDs include:

• Foreign Passport, • Matrícula Consular, • Voter Registration Card, • government-issued Foreign Driver’s License, • Or other foreign government-issued IDs.

Please fax this sheet along with a copy of the customers/ your ID to the number listed below. At NetSpend, we recognize that the trust of our customers is one of our most important assets. We ensure that our customer information is secure, private, and used only in a manner consistent with our customers’ wishes. We will safeguard, according to our strict standards of security and confidentiality, any and all information our customers share with us. We will release information only with a customer’s consent or request, or when we are required to do so by law or other regulatory authority. For complete details regarding NetSpend’s Privacy policies, please refer to the Terms & Conditions in the user guide. For Questions: Customers may call our Customer Service Department at the number printed on the back of the prepaid card. Store Tellers should call our Client Services Department.

Instructions on how to send FAX

Enter Last 10 digits of card number. (Number is located on the front of your Visa Prepaid Card.) X X X X - X X ___ ___ - ___ ___ ___ ___ - ___ ___ ___ ___

To: NetSpend Compliance Department From: Store Name: From Teller Name: Fax: 1-866-358-0526 Store Number: # of pages (including cover): Store Phone Number:

1. Make a copy of your foreign government-issued Photo ID. 2. Fill out this form and send it along with the photo copy of your ID to: 1-866-358-0526.

Cardholder Information: Name:____________________________________________________________________ Phone Number:_____________________________________________________________

(Template RM006E)


PORTADA DE FAX Identificación Extranjera

Atención: Clientes de NetSpend / Distribuidores Todos las tarjeta habientes que no tienen número de Seguro Social, pero si tienen una identificación al día emitida por el país de su origen, deben de proveer a NetSpend una copia de la identificación extranjera dentro de 30 días de haber comprado la tarjeta prepagada. Tipos de identificaciones extranjeras que son aceptadas: Pasaporte Extranjero, Matrícula Consular, Credencial Electoral, Licencia de Conducir, u otra identificación emitida por el gobierno. Por favor envíe por fax este documento junto con la copia de identificación extranjera al número debajo. En NetSpend, reconocemos que la confianza de nuestros clientes es uno de nuestros valores más importantes. Aseguramos la integridad de la privacidad de cada uno de nuestros clientes y aseguramos que la información es utilizada consistentemente con sus deseos. Guardaremos, de acuerdo con nuestros altos estándares de seguridad y confidencialidad, toda y cualquier información que nuestros clientes compartan con nosotros. Compartimos la información solamente si el cliente lo pide o con su consentimiento, o cuando la ley u otra autoridad gubernamental lo exige. Para más detalles sobre la política de privacidad de NetSpend, favor de leer los términos y condiciones en el guía del usuario. Los clientes que tienen preguntas pueden llamar al número de servicio al cliente que está detrás de la tarjeta temporal prepagada. Distribuidores con preguntas, pueden llamar al número del servicio al distribuidor.

Destinatario: NetSpend Compliance Department Nombre del Remitente: Nombre del empleado de tienda: Nombre de tienda: # de Fax: 1-866-358-0526 # de tienda: # de páginas : # de teléfono de tienda: Asunto de Fax: Petición de Aprobación de Identificación Extranjera

Escriba los últimos 10 dígitos de la tarjeta temporal prepagada. (El número se encuentra enfrente de la tarjeta)

X X X X - X X ___ ___ - ___ ___ ___ ___ - ___ ___ ___ ___

(Template RM006S)

Pega una copia de la identificación en esta área.


Client Services Who are we?

The Client Services Team is your greatest resource for information regarding product knowledge/new products, customer inquiries, policies and procedures, IT related issues, as well as your contact for replenishment or replacement supplies. But we are not limited to these functions…we are here to provide quality service to you, our Valued Partner. We can be reached by calling 1-866-397-5643 or 512-532-8247. Client Services Department Hours of Operation: Monday thru Friday: 8am – 10pm CST Saturday: 8am – 6pm CST Sunday: 9am – 6 pm CST

What are our functions?

1. Supplies: Card Shipments – Please allow at least 1 full week for delivery. Marketing Materials – i.e. posters, demonstration cards, window clings, etc. Please contact us to report

missing card shipments.

2. Adjustments: Cancellation of Loads - Please contact Client Services as soon as the error is discovered. Funds no longer

available or funds spent cannot be refunded to the store.

3. Training: Phone Training – We can provide over the phone training to your location with regards to our card

products, policies & procedures, Point of Sale processing, and most any other question you may have. Reference Materials – We’ll be happy to provide reference information or guides we have available

regarding our products.

4. Deposit/Sale Verification – Client Services can verify whether or not a sale or load was processed correctly. (For security reasons, we have limited access to customer accounts. Should a customer have questions regarding their account activity please advise them to call Customer Service at 1-86-NetSpend (1-866-387-7363).)

5. IT Support – Contact us to report outages as well as your main office. We will be happy to work with your main office to resolve any system errors or issues you may experience.

6. Partner Inquiries: If you have a question, we’ll have the answer!! So that we may be able to serve you promptly, please do not provide the Client Services number to customers.


Client Services Awareness Notice

Please be aware of the following. It has been reported by a few distributors that people have been calling tellers/associates at the store level

claiming they are from "NetSpend or your Corporate Office" trying to get them to add money to certain

accounts to test, because of a transmission failure. Unfortunately some tellers/associates have added the money

to the account. In turn the money is immediately withdrawn at an ATM by the caller or someone else. Please

inform all tellers/associates about these scammers, as NetSpend will NEVER call to do such a test.

Please continue to remind tellers NOT to add any money into any account without the CASH and CARD in

hand. The person behind the scam has continued to contact our distributors, posing as a NetSpend Employee.

If they have any questions, or suspicions, have them contact NetSpend Client Services at 866-397-5643. I have

attached our contact information sheet in case you need to contact us after hours.

Thank you for your attention to this important matter.

Melissa Sullivan

Client Services Manager

Netspend Corporation


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