Labor Law Guy

Some Unemployed Are Being Taken to the Bank

Posted in Random Musings by laborlawguy on February 24, 2009

NEWS ITEM: At least 30 states have contracted with banks to provide direct-deposit unemployment benefits, some of which come in the form of a debit card. This saves the states the cost of printing checks and mailing them.

REALITY: Some banks are abusing the system by charging fees to use these unemployment debit cards. Try $20 for trying to “charge” too much on the card–an overdraft fee when all the bank has to do is refuse the charge. Or how about 50 cents to check your balance? A fee per transaction each time you make a withdrawal? Etc. Etc.

Here’s one man’s story:

Arthur Santa-Maria, a laid-off engineer who lives just outside Albuquerque, N.M., said he didn’t pay any fees the first time he was laid off, for several months in 2007. His unemployment benefits were paid by paper checks. He found a new job last year but was laid off again last fall.

This time, he was issued a Bank of America debit card—a “prepaid” card in industry lingo—but he was surprised to learn he had to pay fees to get his money. He asked the bank to waive them. It said no. That’s when Santa-Maria called back to ask how to check his account online. He logged on and saw that the call cost him a half dollar. To avoid more fees, Santa-Maria found a Bank of America ATM at a strip mall and withdrew $80 at no charge. When he got back to his car, he decided to take out the rest of his money—$250—and deposit it in his bank account.

Afterward, Santa-Maria logged on to his account and saw a charge of $1.50 for two withdrawals in one day.


2 Responses

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  1. Steve Whitaker said, on March 6, 2009 at 8:16 pm

    I’m a financial advisor I can’t stand the banks. I admire them for their knowledge with money but they couldn’t be the publics worse nightmare. They will nickle and dime everyone…and guess what we get to bail them out when they screw up. How convenient.

    I think thats wrong that someone would charge to receive unemployment benefits when that money is giving that bank business. So typical of the bank to. They are willing to take your money but never want to give it back.

  2. Ron said, on March 13, 2009 at 10:26 pm

    For any of you who find yourself in the check or debit card option… take the 3rd! Go open a checking account to keep the money in since most now need very little to open and most banks have a free checking option. You could also do what I do, I have an account with OnBank who offers higher interest rates on MMA Savings vs the savings accounts of my local banks. I have the unemployment direct deposited into that account, and then transfer what I need to pay for the bills and expenses I know I have to pay, plus a little extra for other spending, into a checking account. The rest I let sit in the MMA account so I can earn at least some extra interest off of the money I can set aside.

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