Report: States force jobless to pay needless fees

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Posted: Jan 29, 2013 5:22 AM
Source: Associated Press

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Topics: states, unemployment, fees, benefits, wbrz

WASHINGTON - A report from a consumer group says states are costing unemployed Americans millions in unnecessary fees for their benefit payments.

The National Consumer Law Center says the jobless are getting hit by unnecessary fees on bank issued payment cards that states encourage or require recipients to use.

The report says states issue bank cards automatically, require complicated paperwork or phone calls to set up direct deposit and fail to explain the card fees.

The old paper check system used to cost states millions of dollars each year to print and mail the payments. Big banks seized on that as a business opportunity and touted the cards as a win-win for states and recipients who had no bank accounts.

But most of the unemployed people being hit with bank card fees do have bank accounts so the cards effectively shifted the cost from governments to jobless individuals.

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