It's been a year since I last updated the site, but thanks to some interest from a journalist, I am inspired to provide some new Research and surf around to see what the interwebs have to say about the Eppicard in 2012. It seems that unhappiness with the card is building. Many of the new articles posted below are complaints about the card by Eppicard users. Maybe the tipping point is near.
Also noted is that the reports of fraud targeting Eppicard users have been a constant throughout the time I've been following this issue. I generally don't post those, but I do look at them and it strikes me that having a special type of card for poor people provides an opportunity for criminals to specifically target them, much like advertisers profile people for marketing.
The Huffington Post also has a list of articles about all sorts of benefit cards, not just the Eppicard. The information on this website is only a part of the picture. JP Morgan Chase and Citibank also have thriving government benefit card businesses that also have egregious fees, in some cases worse than the Eppicard.
Consumer Affairs - 239 "complaints and reviews" largely dealing with cancellations, fees, and lousy customer service, including allegations that the customer service operators would hang up without speaking and still charge the fee for the call. Overall satisfaction rating: less than one star. 1% gave Eppicard the highest possible rating, 86% gave the lowest possible rating.
KENS5 San Antonio - Centeno $500 had been deposited into the account two days earlier and that she hadn't used any of it. She check the account at home and found someone in Brazil had drained her account. Centeno immediately called the Eppicard people, who told her they couldn't freeze the account. So she called the Attorney General's office, but didn't get any help there, either."
National Consumer Law Center - 40 states now use prepaid cards instead of paper checks to pay some or all recipients of unemployment compensation (UC). Prepaid cards provide access to electronic payments and can help unbanked workers to avoid check cashing fees and the risks of carrying cash. But too many unemployed Americans are getting stung with unnecessary and poorly disclosed fees at a financially stressful time when they need every penny.
March 23, 2011: Note about coverage of debit card programs.
I started googling for articles about this back in March 2009 and after taking a break for a while, I added some more content to the page in August 2009. At that time, I found that the government benefit fee issue was not being covered any more and all the articles and websites I found were banking industry accolades about what a great business it is. I put some of those links at the bottom of this page. In the midst of the bailout, the benefit card industry exploded.
Coupled with that was a lot of outrage over the overdraft fees that are disproportionately charged to low income, low balance customers with regular bank-issued debit cards. This seems to have been partly inspired by a CA Supreme Court ruling that Social Security balances can be debited to the bank to cover overdraft fees. Since I thought at the time that regulation of bank-issued cards would lead to regulation of benefit cards, I started posting links on both issues. Seems that maybe I was wrong about that.
As of 2011, I haven't updated the site in over a year, but I had a recent EPPI experience that really set off alarm bells when I read the top article below.
Here's my March 2011story:
In fairness, I will start by saying I had allowed a pretty significant child support balance to build up on the card. With plans to invest it in my son's college fund, I went to Wells Fargo/Wachovia who represent Comerica in NJ, presented my card and asked them for a check for the balance. They said no, you have to go to your own bank and do a balance transfer (not what it said in the paperwork). So I went to Bank of America, presented the card and asked them to transfer it into my account there. They said no, there's too much on there so you can only get half today.
Note that there's a fee for getting the money from a bank other than Wells Fargo, and there's also a fee for more than one withdrawal in a month.
Crooks & Liars - Minnesota Republicans are pushing legislation that would make it a crime for people on public assistance to have more $20 in cash in their pockets any given month. This represents a change from their initial proposal, which banned them from having any money at all.
House File 171 would make it so that families on MFIP - and disabled single adults on General Assistance and Minnesota Supplemental Aid - could not have their cash grants in cash or put into a checking account. Rather, they could only use a state-issued debit card at special terminals in certain businesses that are set up to accept the card.
Auditor of Public Accounts, Commonwealth of Virginia - This debit card is the EPPI Debit MasterCard, and it provides recipients with a traditional debit card accepted at any location that accepts MasterCard, Maestro, or Cirrus cards. There is no monthly service fee associated with the card; however, cardholders can make only two withdrawals per month or they must pay additional fees. There are also fees charged to cardholders for making more than one visit to a teller window each month, ATM balance inquiries, card replacement, international transactions, and other miscellaneous services.
There is little to no cost to the Commonwealth for administering the EPPI card program. There are no fees charged by the banking contractor for administering the program, and the only cost to the Commonwealth is setting up the payee for direct deposit, just as they would for any employee payroll.
Bloomberg News - Legislation limiting overdraft fees may result in the collapse of almost 3,000 banks, especially community banks that rely on the fees for income. And consumers may see more returned checks, which also come with fees, and the demise of free checking, said Moebs, the economist.
Note: There is no mention of how this legislation might be applied to other unfair fees or to government benefit cards.
American Banker - "The card is aimed mainly at the approximately 4 million people who receive federal benefit checks and do not have bank accounts."
This is a positive spin article that puts numbers on the scope of Government Benefit Card use. It says there are ATMs that are 'surcharge free' but that does not include the 75 cent transaction fee for withdrawals. See below for more about how California courts ruled that banks can access Social Security payments to cover overdraft fees.
Credit Info Center - CA - If you live in California and you collect Social Security, it is time to pay better attention to your account balances - because Uncle Sam has decided that the overdraft fees you “owe” the bank can be taken directly from your Social Security deposits.
USA Today - Even as regulators crack down on abusive mortgage and credit card practices, another type of lending threatens to mire consumers in a credit trap.....what began as a customer service has often become an important revenue driver for banks at the expense of the most vulnerable consumers, according to bank memos reviewed by USA TODAY and interviews with industry insiders.
ABC News - A new national survey of 2,000 U.S. banks, conducted by Moebs Services -- an economic research firm that gathers data for the banking industry and U.S. government -- shows overdraft fees climbing. And the biggest banks are packing some of the fattest fees.
US News & World Report - Social Security recipients can now get monthly payments on a prepaid debit card. The Direct Express Debit MasterCard is being rolled out in 10 states by the Treasury Department and Dallas-based Comerica Bank. It's an alternative to paper checks and direct deposit. But as with every financial product, there is some fine print. Here's what you need to know about the Social Security prepaid debit card.
Los Angeles Times - The California Supreme Court unanimously overturned a billion-dollar class-action award against Bank of America Corp. on Monday, ruling that banks can collect overdraft fees from accounts in which government benefits intended for subsistence are directly deposited.
The ruling threw out a 2004 verdict by a San Francisco jury that found the bank violated state law by taking fees for insufficient funds from accounts set up to receive Social Security benefits.
Philadelphia, PA - CNN - If you're out of work like Steve Lippe, who was laid off from his job as a salesman in January, you know you already have problems. But looking at the fine print that came with his new unemployment debit card, he became livid.
Dallas, TX - Dallas Morning News - First, Arthur Santa-Maria called Bank of America to ask how to check the balance of his new unemployment benefits debit card. The bank charged him 50 cents.
He chose not to complain. That would have cost another 50 cents.
San Antonio, TX - Associated Press - For hundreds of thousands of workers losing their jobs during the recession, there's a new twist to their financial pain: Even as they're collecting unemployment benefits, they're paying bank fees just to get access to their money.
Las Vegas, NV - Las Vegas Review Journal - It's a nationwide trend that grabbed the attention of Congress last week, as key representatives called for a closer look at how states disburse unemployment benefits.
Ashtabula, OH - Star Beacon - The check will not be in the mail after July.
The Ohio Department of Job and Family Services is moving toward electronic delivery of Ohio Works First and disability financial assistance benefits.
San Antonio, TX - Business Wire - Over the past several days the news has been very active outlining a variety of
fees that are being charged by banks that are charging recipients of
unemployment benefits delivered to a bank debit card. The fees range from around
$3.00 to $20.00.
Note: This is interesting because it has Ficentive, a payment system company, blaming the banks for saying that their technology does not support cards without fees. Apparently Texas had a contract requirement for a no fee card and the banks shot it down.
Washington, DC - Washington Post - "After the card is activated, instead of us sending out a check to a post office box and hoping it doesn't get lost or stolen, they will know that their benefits are deposited in their card account on their payment date," Judith R. Tillman, commissioner of Treasury's Financial Management Service, said yesterday. "They can go to an ATM, go to a post office if they need a money order, go to almost any bank or . . . use it at retail locations to pay for a purchase and get cash back."
Tillman said the card is free and there are no fees for using it. Here is the website where you can see for yourself that this card is loaded with fees. www.usdirectexpress.com. Does the administrator of the program not know about the fees, or did she lie to the Washington Post?
Los Angeles, CA - Los Angeles Times - The government plans to announce today that it will offer MasterCard debit cards to the estimated 4 million Social Security recipients who don't have bank accounts. .
AARP - The U.S. government will soon offer Social Security recipients a new way to receive benefits: debit cards.
The cards, which target the 4 million Social Security and Supplemental Security Income recipients without bank accounts, will debut this spring in four states: Texas, Arkansas, Louisiana and Oklahoma, and are expected to be available nationwide by the end of the summer.
Links to the Benefit Card Industry
Note that none of these marketing sites mention fees charged to the consumers of the service.
Dead Presidents Indian Equity Research Blog
I find it interesting that they have a section in their analysis of Axis Bank that discusses how much they are making from government benefit card contracts:
"The Bank has successfully implemented the Electronic Benefit Transfer (EBT)
Project, which constitutes a new line of business, contributing to fee as
well as float income, towards handling disbursements relating to various
government benefit schemes through smart cards under an IT enabled
financial inclusion model in two districts (Krishna and Rangareddy) in
Andhra Pradesh. The total government business throughput during the year
was Rs. 60,869 crores against Rs. 53,585 crores reported in the previous
Hyper Wallet Benefits Card
Hyper Wallet's marketing site for getting government benefit accounts.
Mastercard Benefits Card
Mastercard's marketing site for getting government benefit accounts.
Payments News List of Government Benefit Card Articles
This is a news service that gathers information about developments in the payments industry. Of course, they think government benefit cards are a great idea and they have a news category about how it's going.
On here you can find out about the integration of benefit acceptance, case management, and payment administration. They even do outsourcing for customer support. The case study in the right hand sidebar here talks about how their call center is awesome for managing all questions about benefits. This sounds to me like people's case information is being made available to the vendor. Seems like a bad idea, especially in light of the EPPI Card phishing scam that has hit several states in recent months.
Ficentive is another vendor of benefit card systems. Interestingly, they came out in this article saying that they are concerned about the fees, which are not required by their system. They point the finger at the banks for refusing to issue no-fee cards.