Prepaid Debit Card Reviews, Complaints, Etc

Tag: direct deposit

  • IRS Rule Change Targets Identity Thieves

    IRS Rule Change Targets Identity Thieves

    It’s not just big retailers like Target that are grappling with ways to thwart identity theft and fraud. The Internal Revenue Service recently announced plans to limit direct deposits of refunds in an effort to fight criminal activity targeted at taxpayers.

    According to a recent article in Accounting Today, the IRS will limit the number of direct deposit refunds that can go into a single account or prepaid debit card to three. Once the IRS has made three electronic deposits into a single account it will automatically issue paper checks for any additional refunds. Any taxpayer who does reach the threshold of three direct deposits will be notified by the IRS that they’ve reached their limit and will receive only paper checks in the future.

    The new procedures will go into effect in January of 2015 and are meant to make it more difficult for criminals to steal taxpayer identities and hijack their deposits. Currently, an identity thief or unscrupulous accountant could set up an account or obtain a prepaid debit card into which they could funnel multiple tax refunds. “The new limitations will also protect taxpayers from preparers who obtain payment from their tax preparation services by depositing part or all of their clients’ refunds into the preparers’ own bank accounts,” said the IRS in a statement. “The new direct deposit limits will help eliminate this type of abuse.”

    However, the IRS did caution that some responsible taxpayers will be negatively impacted by this change in procedure. For instance, families that file multiple tax returns and have all their refunds direct deposited into a single account will need to either open new accounts or be willing to receive paper checks. Despite the change, the IRS still urges taxpayers to utilize direct deposit. “The vast majority of taxpayers will not be affected by this limitation, and we would encourage taxpayers and tax preparers to continue to use direct deposit,” the IRS said. “It is the fastest, safest way for taxpayers to receive refunds.”

     

     

  • Changes To American Express Serve Cards

    Changes To American Express Serve Cards

    Starting in November, American Express Serve prepaid customers will be able to add cash to their accounts at CVS and 7-Eleven with no fees.

    by Shane Tripcony

    The competition to serve the millions of Americans lacking traditional bank accounts just got a little stiffer. On October 8, American Express announced significant new changes to how its Serve prepaid card works. Starting in November, Serve customers will be able to load cash to their accounts, for free, while shopping at over 14,000 CVS and 7-Eleven stores nationwide. Additionally, American Express Serve customers will also be able to add funds via direct deposit of a paycheck without incurring a fee. By the end of 2013, customers with a smartphone camera will be able to take a picture of a paper check and add that money directly into their account by using Serve’s mobile app.

    In making these changes to how the Serve card functions, American Express declared that it was directly targeting the almost 70 million so-called “under banked” Americans. “Unfortunately, the traditional banking system is not easily accessible to large segments of the population, making managing money cumbersome and expensive for many,” says Dan Schulman, Group President of Enterprise Growth at American Express. “Today, we’ve added a number of new features to make the management and movement of money more affordable and convenient for everyone.”

    In the past, individuals who did not have bank accounts have had to rely on check cashing or payday loan services. Many of which charge exorbitant fees or prepaid debit cards layered with charges for everything from adding money to an account to checking a balance. While there are still plenty of prepaid cards that charge high fees, more and more big financial players like Chase, U.S. Bank and PNC are now offering low-fee options.

    The changes American Express has made to its Serve card are meant to address what it sees as the substantial charges that come with simply adding money to an account. Citing research from Javelin Strategy and Research, American Express says that 41 percent of under banked customers report paying between $3.00 and $3.99 to reload their prepaid cards. Depending on how often someone reloads their card, American Express estimates that utilizing Serve, which charges a $1 monthly fee, could save between $72 and $240 annually. The savings could be even greater if a Serve customer opts to use direct deposit or adds at least $500 to an account over the course of a month.

    In addition to a variety of fee-free ways to add money to Serve card accounts, American Express also allows customers to withdraw money from MoneyPass ATMs for free as well as pay bills for free using Serve.com and the Serve mobile app.

Prepaid Debit Card Reviews, Complaints, Etc