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Prepaid card to monitor client spending habits gets makeover

August 28, 2014
by Gary A. Enos, Editor
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A prepaid credit card program that was established in 2012 to help families keep tabs on an addicted loved one's spending patterns has undergone a revamping to focus on the treatment center market.

More than a dozen treatment and recovery facilities, including names such as Jaywalker Lodge and St. Paul Sober Living, have signed up to use the Next Step MasterCard since the new program went live in July. Next Step Network, LLC founder and CEO Eric Dresdale says the family program that was launched two years ago has been placed on temporary hold while the technology for the new effort is introduced.

The new program is designed to allow treatment centers, intensive outpatient programs or recovery residences that employ resident spending allowances to eliminate use of cash or gift cards for this purpose. Providers can individualize the restrictions they impose on use of the prepaid card, barring clients from making payments to merchants whose businesses involve alcohol, gambling or related pursuits, as well as imposing restrictions on spending hours or amounts.

“They don't have to choose from buckets we put in place for them,” says Dresdale. “On top of the pre-defined merchant categories, facilities can block out other merchant categories. If they wanted to, they could block out everything but grocery stores.”

Dresdale and his business partners established Next Step Network based in part on their own experiences struggling with money management issues in their early recovery from addiction.

The original version of the prepaid credit card program found significantly reduced relapse rates among participants, with 90% of a group of 150 cardholders also improving their spending patterns on a month-over-month basis, says Dresdale. “That program allowed us to prove our concept: By eliminating cash and adding restrictions, we could discount the likelihood of relapse and bring about behavior modification as it relates to spending,” he says.

Facilities using the prepaid cards can adjust the restrictions on the card accounts at any time, and can suspend use of the card if they suspect inappropriate spending by a client.

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