Today's Birthdays
There are no members with birthdays on this day.
Current Topics
Beautiful, beautiful language...
by Ken Condon - 12/06/21 06:24 AM
The US's future: The United States of Giiead
by pdx rick - 12/06/21 04:54 AM
RoundTable For Fall 2021
by pondering_it_all - 12/06/21 02:57 AM
lying on the internet
by pondering_it_all - 12/06/21 02:48 AM
What's for dinner?
by Greger - 12/05/21 11:14 PM
A Musical Quiz
by Ken Condon - 12/05/21 11:01 PM
Winning
by TatumAH - 12/05/21 07:44 PM
The Drift, Thread Association Thread
by TatumAH - 12/05/21 04:17 PM
... doubt is our product...
by TatumAH - 12/04/21 08:13 PM
Denialism
by Greger - 12/03/21 03:37 PM
Coronavirus: The Plague of The 21st Century?
by pondering_it_all - 12/01/21 08:51 PM
I’ll Buy That
by Greger - 12/01/21 07:22 PM
Boundaries for Facebook
by jgw - 11/30/21 06:26 PM
Pacific Northwest Weather
by pdx rick - 11/28/21 08:59 PM
A Fungus Amungus
by logtroll - 11/28/21 01:25 PM
Republicans promise brutal revenge in 2022
by pdx rick - 11/27/21 08:45 PM
masks and vaccinations
by logtroll - 11/27/21 01:36 PM
Vigilantism - why isn’t it illegal?
by logtroll - 11/25/21 11:46 PM
Popular Topics(Views)
9,690,209 my own book page
4,787,104 We shall overcome
3,877,709 Campaign 2016
3,536,668 Trump's Trumpet
2,798,455 3 word story game
Previous Thread
Next Thread
Print Thread
Rate Thread
Joined: Jan 2001
Posts: 27,583
Administrator
Bionic Scribe
OP Offline
Administrator
Bionic Scribe
Joined: Jan 2001
Posts: 27,583
States force unemployed to pay needless fees

By DANIEL WAGNER | Associated Press
January 29, 2013



The unemployed: Target of needless fees


Jobless Americans are paying millions in unnecessary fees to collect unemployment benefits because of state policies encouraging them to get the money through bank-issued payment cards, according to a new report from a consumer group.

People are using the fee-heavy cards instead of getting their payments deposited directly to their bank accounts. Thats because states issue bank cards automatically, require complicated paperwork or phone calls to set up direct deposit and fail to explain the card fees, according to a report issued Tuesday by the National Consumer Law Center, a nonprofit group that seeks to protect low-income Americans from unfair financial-services products. An early copy of the report was obtained by The Associated Press.

Until the past decade, states distributed unemployment compensation by mailing out paper checks. Some also allowed direct deposit. The system worked well for people who had bank accounts and could deposit the check without paying a fee.

It also cost states millions of dollars each year to print and mail the checks.

Banks including JPMorgan Chase & Co., U.S. Bancorp and Bank of America Corp. seized on government payments as a business opportunity. They pitched card programs to states as a win-win: States would save millions in overhead costs because the cards would be issued for free. And people without bank accounts would avoid the big fees charged by storefront check cashers.

However, most of the people being hit with fees already have bank accounts. The bank-state partnerships effectively shifted the cost of distributing payments from governments to individuals. The money needed to cover those costs is deducted from peoples unemployment benefits in the form of fees.

Consumer advocates like NCLC are focused on ensuring access to the direct-deposit option so that people can avoid the card fees.

The trouble, the new report says, is that many states make it difficult for people to sign up for direct deposit. The rate of people using direct deposit ranges from a national high of 82 percent in Minnesota to a low of 16 percent in Arizona, the report says.

Minnesota offers direct deposit to people when they apply for benefits, and allows them to change their payment method online or over the phone, the report says.

In Arizona, by contrast, people are automatically enrolled in the card program. After they receive the card, they must find a paper form, fill it out, and submit it by mail. There is no way to change payment methods online or over the phone.

The difference in direct-deposit rates among states seems primarily due to how hard or easy the state makes it for workers to choose direct deposit, the report says.

In five states California, Indiana, Kansas, Maryland and Nevada unemployed people arent offered direct deposit at all. The report says that setup is illegal under a federal law that bars states from requiring benefits recipients to open an account at a particular bank.

The federal government recommended in 2009 that people with bank accounts receive payments via direct deposit. Nearly four years later, the report says, there is no excuse for any state not to be offering direct deposit as the first choice for payment of unemployment benefits.

Banks make more money when more people use the cards. In the past, some of their deals with states prevented states from offering direct deposit, or required states to promote the card program as a first option.

To cover the cost of issuing cards and running the programs, banks charge a plethora of fees, including charges for balance inquiries, phone calls to customer support, leaving an account inactive for a period of months, or making a purchase using a personal identification number.

Many states have eliminated some fees and improved consumer protections in the two years since NCLC published its first comprehensive review of state unemployment payments. Banks no longer charge overdraft fees, which skimmed up to $20 from the benefits of card users whose spending exceeded the balance on the card.

Pennsylvania was singled out for praise in the report. Residents of that state will save $5.2 million in card fees each year because the state switched to a lower-fee card.

In part because of the recent improvements, the report says, prepaid cards often are the best option for people who dont have bank accounts. Those people would often pay even bigger fees to storefront check cashing services.

A well-designed prepaid card is safer, cheaper and more convenient than paying to cash a paper check, said Lauren Saunders, one of the reports authors, in a prepared statement. But she said it is no substitute for direct deposit to an account of your own choosing.

Joined: Aug 2008
Posts: 10,853
veteran
Offline
veteran
Joined: Aug 2008
Posts: 10,853
'

In Canada, unemployment benefits (and all other goveranment payments are deposited directly into a person's bank account, no exceptions and a minimum of fuss and paperwork.

Of course, I suppose American right-wingers would scream that Tyrant Canada is forcing all its defenseless citizens to have bank accounts. wink

Joined: Jan 2001
Posts: 27,583
Administrator
Bionic Scribe
OP Offline
Administrator
Bionic Scribe
Joined: Jan 2001
Posts: 27,583
Originally Posted By: numan
'

In Canada, unemployment benefits (and all other goveranment payments are deposited directly into a person's bank account, no exceptions and a minimum of fuss and paperwork.

Of course, I suppose American right-wingers would scream that Tyrant Canada is forcing all its defenseless citizens to have bank accounts. wink


I have no idea what the right-wingers think. I try to avoid their mindset on any subject. And do you have proof that they really think?


milk and Girl Scout cookies ;-)

Save your breath-You may need it to blow up your date.




Joined: Aug 2008
Posts: 10,853
veteran
Offline
veteran
Joined: Aug 2008
Posts: 10,853
'
Originally Posted By: Scoutgal

I have no idea what the right-wingers think....And do you have proof that they really think?

Thank you, Scoutgal -- I stand corrected.

I don't even have evidence that they think -- much less proof !

Joined: Feb 2006
Posts: 11,492
Likes: 71
veteran
Offline
veteran
Joined: Feb 2006
Posts: 11,492
Likes: 71
This is at odds with what is happening at Social Security: No more paper checks. Instead all recipients will have to have a bank account for direct deposit.

Maybe Bank of America can create a new Senior Citizen account so they can rip off retired folks for every direct deposit too.

Joined: Jan 2001
Posts: 27,583
Administrator
Bionic Scribe
OP Offline
Administrator
Bionic Scribe
Joined: Jan 2001
Posts: 27,583
Originally Posted By: pondering_it_all
This is at odds with what is happening at Social Security: No more paper checks. Instead all recipients will have to have a bank account for direct deposit.

Maybe Bank of America can create a new Senior Citizen account so they can rip off retired folks for every direct deposit too.


Don't give them any ideas! nono


milk and Girl Scout cookies ;-)

Save your breath-You may need it to blow up your date.




Joined: Sep 2011
Posts: 17,642
Likes: 25
Moderator
Carpal Tunnel
Offline
Moderator
Carpal Tunnel
Joined: Sep 2011
Posts: 17,642
Likes: 25
The banks have intiated other scams as well. All direct student loans are now administered by third party profit centers loan administrators, exactly the opposite of what Obama put in place just years before to eliminate wasteful middlemen. Guess how that came about?


A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich
Joined: Jan 2001
Posts: 27,583
Administrator
Bionic Scribe
OP Offline
Administrator
Bionic Scribe
Joined: Jan 2001
Posts: 27,583
Originally Posted By: NW Ponderer
The banks have intiated other scams as well. All direct student loans are now administered by third party profit centers loan administrators, exactly the opposite of what Obama put in place just years before to eliminate wasteful middlemen. Guess how that came about?


Geithner?


milk and Girl Scout cookies ;-)

Save your breath-You may need it to blow up your date.





Link Copied to Clipboard
Who's Online Now
0 members (), 27 guests, and 1 robot.
Key: Admin, Global Mod, Mod
Newest Members
SuZQ2, KevFilthyANML, Risky, Gladys G. Jackson, Beach Baby
6,297 Registered Users
Forum Statistics
Forums61
Topics17,257
Posts313,105
Members6,297
Most Online294
Dec 6th, 2017
Powered by UBB.threads™ PHP Forum Software 7.7.5
(Release build 20201027)
Responsive Width:

PHP: 7.4.26 Page Time: 0.012s Queries: 31 (0.003s) Memory: 2.9998 MB (Peak: 3.2531 MB) Data Comp: Zlib Server Time: 2021-12-06 10:59:34 UTC
Valid HTML 5 and Valid CSS