Prepaid and Payroll Cards Get a Lawsuit

Every day we have outrage after outrage against the U.S. worker and middle class.  There is so much economic injustice, it's hard to keep up.  Yet some stories are so outrageous you'll swear out loud and scare the dog.  Such is the story of McDonald's workers being paid by debit cards instead of checks, forced to do so.  An McDonald's ex-employee just sued over it:

The franchise required employees to accept payment on a J.P. Morgan Chase payroll card. But the card, she contends, imposes fees on virtually every transaction, creating a monetary and physical barrier to her hard-earned cash.

Gunshannon worked less than a month at the Shavertown McDonald's location when she learned that the franchise required employees to accept payment on a J.P. Morgan Chase payroll card. But the card, she contends, imposes fees on virtually every transaction, creating a monetary and physical barrier to her hard-earned cash. Among the costs, according to her lawsuit: $1.50 for an ATM withdrawal, $5 for over-the-counter cash withdrawals and $1 to check the balance. There's even a charge to pay a bill online or if the card is lost or stolen.

As a result of all of these fees, McDonald's is paying less than minimum wage.  Now isn't this the epitome of abuse and ripoff?  Prepaid bank cards are being used from so called product rebates to welfare benefits.   Believe this or not, they even have social security benefits on prepaid cards, along with various fees of course. Yet with each card comes the great ripoff of the poor and consumers by taking out a host of fees to even use the card.  Even rebates are using prepaid cards and few bother to read the fine print.  Some are worst than being a fraudulent claim of the rebate amount, they can get you into a world of credit trouble with their terms and fees by just trying to use the prepaid Visa the rebate came on.

Some oft these cards are so bad, you cannot obtain actual cash, they demand your credit information and if one goes one penny over the limit of what is on the card, banks charge overdraft fees to the tune of $20 plus a flurry of other additional fees.  These types of cards usually against people earning very low wages or receiving benefits for they are in need.  Forcing people to be paid on these cards means they are earning less than minimum wage receiving less than their meager benefits and the banks are pocketing their hard won limited funds.

Using prepaid cards isn't new, but instead a growing trend and $60 billion in wages is estimated to be paid out via payroll cards by 2014.  That's quite a siphoning of other people's dough back to the banks via fees charged to use these cards.

The Consumers Union National Consumer Law Center gives us a ripoff reports of prepaid unemployment benefit cards and how America is being fee'd to poverty:  While many states have passed some protections, the bulking of consumers continues as 28 states charge inactivity fees and other fees for even having one's unemployment benefits on a prepaid card.

Think about this.  The great financial reform bill exempted prepaid cards from regulation.  Thus it is no surprise they have proliferated and used by the government.  While proposals have been considered, it seems not much has changed either, as outlined in the Federal Reserve prepaid regulations information.  It's so ridiculous, the FTC's warning video on fees basically implies to just pay lower ones.  There is no mention how these fees are a ripoff generally as checks and cash do not cost normally and one can easily find a no fee bank account still.

 

 

One can write your Congressional representative, not that it will do much good,  After all, squeezing every last dime from the dying middle class has been the agenda for the last 33 years.

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Comments

Obviously McD and JPMorgan bigwigs worked this out and lovin' it

Gotta wonder what kind of money they split in the boardrooms and in secret agreements to pull this off. Creating wage and forced banking agreements that bone employees = business as usual for people that will never work anywhere for under $10 million/year because they truly believe they are something special.

Come on, crap like this was predictable. Why does every level of govt. and why do most private employers force direct deposit? People are now forced to bank with TBTF (although small banks still exist, but smaller numbers). They force support of TBTF - how's that capitalism or free market choice? It's not, it's guaranteed business for big companies forced on employees with no negotiating power. Same could be said of 401(k)s and pension plans that force investments into funds selected by administrators that pour hundreds of billions of $s into funds run poorly by banksters that make billions for losing $ and not breaking a sweat doing it.

Company towns, being paid in cigarettes and gum, being paid less than earned wages, etc. it's been done here and goes on overseas too, nothing new - history repeats itself all the time, so what are we going to about it because the people renting our politicians love this system and the puppets in the media and politics love it too.

McDonald's will probably pay people in their food only soon. "Loyal" employees would not complain because the bosses would explain it would help McD stock and good employees support their employers at all costs. If they died from eating only McDonald's 24/7, McDonald's would turn around and claim it was only meant to be part of a balanced diet and the employees were to blame. And the politicians would echo that claim and say anything else their corporate paymasters demanded while dining on $100 lunches with filet mignon. Wish I was wrong, but I'm not.

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direct deposit is good

People get paid faster, there is less paper, i.e. no paper checks, but most employers give the option to receive a paper check.

There are no fees associated with direct deposit, unlike payroll cards and prepaid cards. They take money from accessing an ATM in many cases, "inactivity fees" and the biggest is non-sufficient fund fees.

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Direct deposit used to be an option

Guaranteed business for banks. Direct deposit used to be an option, now it's mandatory. Now along with SSN and everything else, best hope no one in any company anywhere knows how to use bank account numbers and other personal info. to rip off employees' $. At some point personal info., $ info., and every single personal detail of every person in the working world in return for a job = too much trouble and crime for too many people. Now, piss into that cup, give me a blood sample, give me 20 people that have known you for 10+ years, give me your fingerprints where you bank, eat, drink, socialize, etc. in return for a paycheck. Sound good? It's just too much, way too much, especially when it was done so well without all this nonsense for so long.

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true, giving employers access to bank accounts

Is not good.

I've never heard of a case where an employer did anything with that information, or say took out money they put into the account.

But these days, where satellites can zoom in to see your clothing label, honestly, do you think they do not already have your personal data?

To get a job, you have to give your social security numbers, unless of course you are illegal, then our Congress has deemed it perfectly fine to use other people's social security numbers.

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I'm sure it happens - just like insurance on dead employees

These things happen, but the corporate press won't cover it. Never heard of how a company could take out insurance on its own employees without them knowing about it, but then we heard about "Dead Peasant" insurance. ID theft happens all the time, HR departments are filled with people that couldn't pass background checks themselves, visa recipients, outsourced HR, etc. Too easy for all our info. to go to the cheapest labor, and some, not all, but some of those people really don't have the best intentions. Especially considering they were hired because they worked for less, of course extra $ directly or turning it over to someone else is an option. It's completely logical. Especially since bank employees themselves have been busted in ID thefts and stealing from bank customers, it's just to easy for them to have friends and accomplices in big companies that also have access to signatures, payroll info., etc. No one is looking out for the employees and customers, it's all "turn over everything for a job or account, and if you get screwed, oh well, no recourse." We are completely unprotected. The FBI cares more about a celebrity tape or photo being released than they do about the average citizens getting screwed through lax security, outsourcing, etc.

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Dead Peasant

Yes and they collect the benefit while the family gets nothing. I think 60 Minutes covered that, but of course, nothing happened.

If the NSA is spying on people to the point they know your underwear label, well, they assuredly know about all of the corporate crime being committed yet do nothing.

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Debit cards

More crony capitalism (from the Center from Public Integrity) Comerica has an exclusive contract to issue Direct Express cards, which Treasury uses to deliver Social Security and other State and Federal benefits to people [such as unemployment benefits and food stamps]. Comerica won the original deal in 2008 by offering to provide the cards at no cost to taxpayers. About two years later, Treasury quietly amended the contract to add tens of millions in new payments to Comerica. Treasury's special contracts with banks rarely are put out for competitive bidding.

http://www.publicintegrity.org/2013/06/28/12903/impact-treasury-open-com...

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