Fees for Unemployment Debit Card

[Coalition]

The Mafia wishes they could do this

Laid Off? Get Ready To Pay Bank Fees On Your "Unemployment Debit Card"

By Meg Marco, 4:17 PM on Fri Feb 20 2009

The Associate Press says that 30 states have cut deals with bailed out banks like JP Morgan Chase, Citigroup, and Bank of America to distribute unemployment benefits on debit cards instead of paper checks. The catch? All of these programs have fees - and in some states the cards are mandatory.

The AP talked to one recently laid off worker who paid $6 in fees to access $80 of her unemployment money.

"It's a racket. It's a scam," Rachel Davis, a 38-year-old dental technician from St. Louis who was laid off in October, told the AP.

Why are the banks doing this? The programs have the potential to be a huge source of revenue. Bank collect interest on the money before it is withdrawn, transaction fees of 1 to 3 percent whenever the cards are used at a store, ATM fees, fees to speak to a banker, fees to make withdrawals at a branch, and even overdraft fees. Here's the math:

In Missouri, for instance, 94,883 people claimed unemployment benefits through debit cards from Central Bank. Analysts say a recipient uses a card an average of six to 10 times a month. If each cardholder makes three withdrawals at an out-of-network ATM, at a fee of $1.75, the bank would collect nearly $500,000. If half of the cardholders also dial customer service three times in any given week (the first time is free; after that, it's 25 cents a call), the bank's revenue would jump to more than $521,000. That would yield $6.3 million a year.

Here are some more examples of the type of fees charged to users of these cards.

This may have been legal, but I doubt it is right.

[Aaron]

That is shitty, no two ways about it. Whoever came up with this program should be fired immediately.

[Sionnach Glic]

WTF? Someone fire this moron, ASAP.

[Granitehewer]

i always thought that we'd become the borg but now am more convinced of our destiny as ferengi.......

[Lt. Staplic]

the idea itself isn't bad, however the rates their using is rediculously high.

[Monroe]

My work used a similar system for those who didn't have direct deposit. I was like fuck that, I need my bank info for direct despite now lol

[SteveK]

If they don't want to pay the fees, they should just take a check, which would be handled as any other funds.

[Tsukiyumi]

The article explicitly says that the cards are mandatory in some states. What then?

[Lt. Staplic]

contact your local state representative. 8)

[Tsukiyumi]

Right.

[SteveK]

The article explicitly says that the cards are mandatory in some states. What then?

You are correct, it does say that. I did some digging, and one of the states that does require the debit cards is Maryland, according to their unemployment website:
http://www.dllr.state.md.us/employment/ ... debitadvan

To access your funds with your card, free of charge, you can:

* Access cash through bank tellers at any bank that accepts Visa
* Transfer your unemployment insurance payments to your personal bank account (similar to direct deposit)
* Withdraw cash from an ATM at: Citibank branches, MoneyPass ATM network, STARsf/Allpoint ATM network, and7-Eleven stores
* Get cash back at select retail point-of-sale locations
* Make purchases through signature or pin-based transactions

Before I get outraged, I'd like to see if the other states that require the debit card also have as many easy ways to access the money without paying fees.

[Tsukiyumi]

If all of the states have things set up like that, then there is little problem.

[Sonic Glitch]

contact your local state representative. 8)

Yes because they'll totally jump right on that and take care of it. Our legislators obviously have more important things to do, witness PA House Bill 363

[Lt. Staplic]

wow, so the rest of the coutries politicians are just as f****d up as the ones here in Iowa

[Aaron]

contact your local state representative. 8)

Yes because they'll totally jump right on that and take care of it. Our legislators obviously have more important things to do, witness PA House Bill 363

Err...wouldn't that be decided on by the school board? Since when do you require a law to ban mobile phones in schools?