Prepaid Debit Card Reviews, Complaints, Etc

Tag: prepaid card

  • A True Wall Street Occupation?

    A True Wall Street Occupation?

    How the Occupy Card Doesn’t Live up to its Promise  

    by Shane Tripcony

    The terms and conditions of credit, debit and prepaid cards are not what anyone would call scintillating reading. Layered with legalese and hard to decipher jargon, these documents have traditionally (and understandably) been ignored by consumers. Which is too bad because they contain the sort of vital information people need to make smart financial decisions.

    By contrast, the recently announced fee structure for the Occupy Card is a legitimately fascinating read. The Occupy Card is a prepaid debit card that an offshoot of the Occupy Wall Street Movement is hoping to soon introduce to the marketplace, the first of what the so-called Occupy Money Cooperative would like to be an array of financial products and services. And while the proposed fees are not the fully-fledged terms one would wade through with an already available prepaid card, there’s one section you probably won’t find with many other cards: how to avoid the fees. (To be fair, Account Now generously offers tips to save money on their fees page as well, so kudos to Account Now, as well.)

    For instance, the issuers of the Occupy Card dutifully note that it will cost users $1.95 to take money out of an ATM, the result of network and other third party charges (ie. not Occupy’s fault). But to dodge that fee, the Occupy Money Cooperative urges people to get cash back while shopping. It goes on and on like this, with the designers of the Occupy Card offering tips on how to get around fees whenever possible.

    Arguably, in a financial services industry that many believe seeks out revenue generating fees the way a shark hones in on blood, the mere existence of a card-provider tip sheet about avoiding them is incredible. Of course, it’s not a huge surprise, given the Occupy Movement’s loathing of the way it believes Wall Street mistreats its customers and harms society.

    Now, don’t expect other issuers of prepaid debit cards to suddenly follow Occupy’s lead and highlight ways to sidestep their fees. (It sure would be nice, though!) But the sad truth is that they won’t need to because the non-profit, stick-it-to-the-man Occupy Card is far less consumer-friendly than many of the prepaid cards offered by the big banks. That’s right, the greedy capitalists from Wall Street have many, many prepaid debit cards that would cost consumers far less than the offering from the former residents of Zuccotti Park.

    While the Occupy Card has a low monthly account fee of $0.99, the $1.95 charge to take money out of an ATM is painful for anyone – no matter whether it’s the fault of Occupy or not. Also costly are fees for getting basic account information. The Occupy Card charges $2 to speak with a customer service representative and $0.99 to get automated help. As with most consumer-friendly prepaid debit cards, there’s no charge to load the Occupy Card using direct deposit. But any other method to load the card will set people back as much as $5 per transaction. That’s not exactly the kind of help the 99% need.

    It’s also not going to help the Occupy Card gain much traction in the marketplace. Based on our calculations, the average annual fees for the Occupy Card would cost the average consumer $259.40 per year. Truth be told, that lands the Occupy Card squarely in the middle of the pack. There are alternatives, such as Bluebird by American Express, which cost the consumer nothing, based on our standard formula. There are quite a few other cards that average out with lower fees as well. Cards from banking behemoths like Chase and U.S. Bank and American Express offer free ATM withdrawals and cash loads and are, overall, a far better deal for consumers. Even with the fee differences, the Occupy Card does send a message, and many consumers may find the importance of sending that message to be worth those higher fees. Bottom line, here’s the question for everybody: Are you up for occupying the Occupy Card?

  • Chase Cardholders Get Wined And Dined

    Chase Cardholders Get Wined And Dined

    There are already plenty of reasons for foodies to attend the Epcot International Food & Wine Festival, from September 27 until November 11.  Given the global slant of Epcot, one of four theme parks located at the Florida based Walt Disney World Resort, the festival offers its gourmand visitors the opportunity to sample cuisines and drinks at over 25 different international marketplaces. Attendees will also have the chance to learn from professional chefs and bartenders, at special demonstrations and seminars, as well as hobnob with celebrity chefs.

    All of these attractions, and many more, are available to anyone who purchases admission to the park. For holders of Chase debit and credit cards there is an added incentive to make the trek to Florida and attend the festival. Chase cardholders that attend the month-and-a-half long festivities will also have access to the Chase Lounge. Located on the third floor of the American Adventure Pavilion, within the Epcot World Showcase, the Chase Lounge provides visitors a quiet place to enjoy complimentary drinks and recharge mobile phones and tablets, among other things.

    A sponsor of the now 18-year-old festival, Chase has collaborated closely with Disney for over a decade. Besides its Epcot sponsorship, Chase offers a range of Disney branded financial products including the Disney Rewards Visa Card. Last year Chase launched the Disney Visa Debit Card and the Disney Premier Visa Card as well.

    The opportunity to get away from the festival crowds and recharge in the Chase Lounge is just the latest perk by Disney and Chase provided to cardholders. For instance, all Disney Visa Cards offer admission and merchandise savings at Disney World and Disneyland as well as the chance to meet Disney characters at an exclusive cardholder location.

  • Bomb Threats Over Prepaid Cards

    Bomb Threats Over Prepaid Cards

    The number of ways criminals are attempting to utilize prepaid debit cards increasingly seems to match the rapid proliferation of the cards themselves. As we have written about numerous times at BestPrepaidDebitCards.com, thieves have been especially attracted to the use of prepaid debit cards in a scam that involves turning people’s lights off: from California to North Carolina to Pennsylvania, reports about crooks posing as utility workers and threatening to turn off a victim’s power if they don’t pay a late bill using a prepaid card have prompted press release after press release and numerous news articles over the past few months.

    While nobody wants to see their electricity turned off, another scam involving prepaid debit cards is even more alarming. According to a report in The Morning Call newspaper in Pennsylvania, a number of police departments in the area around Allentown were collaborating to investigate a series of threats aimed at local pharmacies.

    In the article, reporter Manuel Gamiz, Jr. writes that the Upper Macungie Township police responded to a threat phoned in to a CVS on Sept. 18. “An employee had refused to load money onto a caller’s Green Dot debit card, and the caller said he would blow up the store,” reads the story. That same afternoon, police in Allentown also responded to the very same threat at another CVS. According to the article, it was the second time in two weeks that Allentown police had been called out to investigate a bomb threat at a pharmacy.

    In each of these cases, police and emergency crews were dispatched to the pharmacies to determine whether or not any explosives were present. In each instance, nothing was found. This report out of Pennsylvania follows similar bomb threats involving prepaid debit cards made to pharmacies in and around New Orleans, Atlanta and Milwaukee.

  • Chicago Introduces Transit Card With Prepaid Option

    Chicago Introduces Transit Card With Prepaid Option

    Prepaid debit cards are now – or at least soon will be – a constant presence on Chicago’s many buses and subway cars. According to a story in the Chicago Tribune, September 9 was the official launch of the so-called Ventra card, a new way for Chicago’s thousands of commuters to pay their fares.

    According to the article, written by Jon Hilkevitch, Ventra cards went on sale on September 9 at vending machines located throughout Chicago Transit Authority (CTA) stations as well as at stores like Walgreens and CVS. The plastic Ventra cards, which cost commuters $5 to purchase – although that amount is credited back for use in paying transit fares if an owner registers their card – are being heavily marketed as transit officials begin a push to retire the paper and plastic transit cards it has issued to riders over the past two decades. The move to plastic cards issued by Ventra – the Latin term for wind, a nod to Chicago’s designation as the Windy City – is expected to save the CTA $50 million over the next decade.

    Understandably, much of the current media attention devoted to the Ventra cards centers on how Chicagoans can transition from using Chicago Card transit cards and other paper tickets to the new option; basically, riders have to wave the radio frequency identification (RFID) enabled over a reader as they enter a subway station or board a bus. Although of less immediate concern to riders of Chicago’s public transport system is a new option that allows Ventra card holders to also open a prepaid debit MasterCard account.

    The new Ventra prepaid debit card is being promoted as a way for transit users to have one card that allows them to both ride the subway and make routine purchases. Like most prepaid cards, the new Ventra version has a host of fees, including a charge of $5 to replace a lost or stolen card, $4.95 to add cash to an account and a $2 monthly account maintenance fee. No doubt, the issuers of the Ventra prepaid debit card hope those who use it will have an easier time than some of the passengers who attempted to use the new fare card on the first day. According to another Chicago Tribune story, there were glitches and complaints aplenty.

  • Prepaid Debit Card Scams Proliferate

    Prepaid Debit Card Scams Proliferate

    Prepaid debit cards are becoming an increasingly popular tool for criminals.

    By Shane Tripcony

    Over the summer utility customers from Virginia to Pennsylvania to California have been targeted in a scam that closely resembles one that was reported on recently by The Beach Reporter in Manhattan Beach, California. In an article titled, “Edison warns its customers of utility bill scam,” the paper told its readers that Southern California Edison customers have been receiving phone calls from people claiming to be from the utility demanding payment for past-due electricity bills.

    The paper reports that the callers threaten Edison customers with having their electricity cut off if they don’t make an immediate payment using a prepaid debit card. As of September, Edison says that about 150 businesses and residents had been victimized at an average cost between $800 and $1000.

    While popular, the utility scam is not the only type that relies on the use of prepaid debit cards. According to a story in the Arizona Republic, two citizens of Surprise, Arizona were indicted in a $2.5 million income-tax scheme involving prepaid debit cards. According to the charges brought by the U.S. Department of Justice, the alleged perpetrators told victims that they could receive “Obama stimulus money” or “government funding” via a prepaid debit card. In return for that promised government money, victims handed over personal information that was used by the alleged criminals to file false federal income-tax returns. In total, the 18-count indictment by the federal government says that the perpetrators received over $2.5 million in refunds.

    A similar scheme also resulted in prison time for a Cincinnati man. According to a report on Cincinnati.com, Dione Howard was sentenced to 12 months and one day in prison and ordered to pay $30,129 to the Internal Revenue Service for his involvement in a crime involving prepaid debit cards. Citing court documents, the report says that Howard purchased 18 names, social security numbers and dates of birth and used them to file false income-tax forms. Howard received a total of $30,129 in fraudulent refunds.

    “This unscrupulous defendant thought he had figured out a clever scheme to thwart the IRS and steal from the American taxpayers,” the story quoted Kathy Enstrom, special agent in charge, IRS Criminal Investigation in the Cincinnati Field Office as saying. “The IRS has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.”

  • Tax Refunds And Prepaid Debit Cards

    Tax Refunds And Prepaid Debit Cards

    Prepaid debit cards have recently become a favored way for states and the federal government to pay tax refunds, but for consumers, whether it is a benefit or not – the answer is, it depends.

    By Shane Tripcony

    The arguments in favor of the use of prepaid debit cards over paper checks in states like Connecticut, Georgia and Louisiana are similar. Not only do citizens who lack a bank account – and therefore cannot take advantage of direct deposit – receive their refund quicker than if it came through the mail in the form of a paper check, but the governments themselves like prepaid debit cards because it save them money.

    Those are a few of the issues John Friedman took up in a recent story for Bloomberg Law entitled, “Policy Perspectives On Tax Refunds: An Economic Analysis Of Government-Sponsored Debit Card Refunds.” Friedman, an assistant professor of public policy at the Harvard Kennedy School and a faculty research fellow at the National Bureau of Economic Research, does an in-depth cost-benefit analysis of the embrace of prepaid debit cards and arrives at some conclusions that go counter to many of the arguments policymakers have made.

    To be sure, Friedman acknowledges just how popular prepaid debit cards have become as a way to dispense tax refunds. In fact, he notes that in the 2012 tax year, almost 20 million taxpayers opted for prepaid debit cards to receive their refunds. Still, despite that increasing popularity, Friedman takes direct aim at the seemingly uncomplicated assertion that governments, and thereby taxpayers, save money by utilizing prepaid debit cards.Even though states like Connecticut report that they saved about $300,000 by sending out prepaid cards instead of paper checks in 2012, Friedman points out that those calculations fail to acknowledge that governments don’t pay account setup fees; instead, taxpayers do. “It is true that state governments can cut their own costs by switching to debit cards from paper checks, but this simply pushes costs off the government budget and onto taxpayers directly in the form of fees,” he writes. “The roughly $1 of government savings is very small in comparison with the average fees incurred by individuals who received their tax refunds via debit card.”

    Although he acknowledges that some taxpayers truly benefit by receiving their tax refunds on a prepaid debit card instead of a check, in particular because of the speed at which it arrives. This speedy refund, he says, means that high-interest debts on payday loans can be paid down quickly and that exorbitant check cashing fees can be avoided. But Friedman also says that the fees that come with the normal use of prepaid cards could make them a less attractive option for others. “Therefore, use of the debit card to receive the tax refund is not costless to individuals,” he says. Because prepaid debit cards are a mixed bag, good for some but bad for others, Friedman urges governments to still offer taxpayers the option of receiving refunds via a paper check.

Prepaid Debit Card Reviews, Complaints, Etc