Stimulus Checks: Prepaid Debit Cards come with attached privacy fees and conditions

Stimulus controls led by the Coronavirus Economic Aid, Relief and Security Act, or the CARES Act, aim to help American families resist the economic impact of the coronavirus pandemic. But the 4 million Americans who received their payments in prepaid debit cards You may be struggling with additional headaches, such as card withdrawals fees and the requirement to share your personal data, says a group of lawmakers.

Prepaid debit cards were run by the Treasury Department as a way to obtain payments to the millions of households for which the IRS had no bank information. The vast majority of taxpayers received their payments by direct deposit into their bank accounts, a free service.

But prepaid debit cards come with some conditions, such as fees and the requirement to share personal data that could be disclosed to outside vendors, according to a letter sent Wednesday by Senator Maggie Hassan of New Hampshire and 14 additional senators to the Secretary of the Treasury. , Steven Mnuchin, and the head of the IRS, Charles Rettig.

Stimulus payments total $ 1,200 for single people earning less than $ 75,000, while married couples earning less than $ 150,000 earn $ 2,400. Children under the age of 17 are eligible to receive $ 500.

The deployment of stimulus payments has been fraught with problems, such as delays in payment delivery and a IRS payment status website That left many consumers confused and concerned due to unclear messages and login issues.

In some cases, consumers thought prepaid debit cards were junk mail, a problem the IRS highlighted last week on social media by telling taxpayers to “check your mail carefully.”

Prepaid debit cards include a $ 2 fee for withdrawing money from an out-of-network ATM and a $ 5 fee for obtaining cash at a bank counter, while those wishing to transfer the money from the card to their accounts Banks “must navigate a complicated registration process and provide substantial personal information,” the senators’ letter says.

“I am very concerned about issues that have been raised by Granite Staters and Americans across the country, including that they lost their debit card because they thought it was a scam, or that they are struggling to use their card without paying additional fees or give personal information, “Hassan said in an email to CBS MoneyWatch.

Hassan said he wants the Treasury to address the problems and “make sure that Americans can have full access to the stimulus payments they desperately need.”

Personal information

The letter challenges the cardholder’s agreement to stimulus payment through prepaid debit cards, which senators say “allows our constituents’ personal information to be shared with third parties for marketing and other business purposes.” .

The cards, managed by Money Network Financial and issued by MetaBank, require consumers to provide “significant personally identifiable information” to activate the cards or transfer the money from the cards, the letter said.

The cardholder agreement says that Money Network Financial “may disclose information to third parties about your Card account or the transactions you make” to “affiliates” and “service providers.”

“This ambiguous language raises serious questions about whether Money Network Financial is allowed to sell personal information of individuals who activated stimulus payment debit cards,” the letter noted.

Senators are asking the Treasury and the IRS to specify how the data could be used and if it will be disclosed, as well as how the Treasury will protect consumers’ personally identifiable information.

Replacement rates

Earlier this month, the IRS said it would waive the $ 7.50 replacement fee for lost cards, a problem for some consumers who thought the envelopes containing the cards were spam and threw them away. The tax agency also said it would reverse any replacement fees that have already been charged to consumers.

But replacement cards take 7-10 business days to arrive, lawmakers said. In order to get the fastest, within 4-7 days, consumers are charged a $ 17 fee, which senators said they are “seriously concerned.”