The prepaid debit cards Kansas and Missouri use to pay accompaniment advisers after coffer accounts got a thumbs-down this anniversary from a customer advancement group.
“Most cards don’t allegation you if you appetite to acquisition the antithesis is on your card,” says Lauren Saunders of the National Customer Law Center, “but the Kansas card, if you go up to the ATM and ask what the antithesis is, they’re activity to allegation you a dollar.”
Saunders says that’s a big botheration back Kansas accompaniment advisers who accept their paychecks on the cards can additionally get hit with a $25 fee for overdrafting their account.
Kansans can be answerable “up to bristles of those fees a month, so up $125 a ages to be taken out of their pay on affairs that could artlessly be denied if there’s no money on the card,” Saunders says.
Missouri accompaniment advisers who accept their paychecks on prepaid cards are additionally accountable to defalcation fees, admitting not the antithesis analysis fees. Both states use pay cards issued by Skylight Financial/NetSpend.
In an email, Ryan Burns with Missouri’s Office of Administration wrote that 1,637 accompaniment advisers accept autonomous to accept bulk cards, a little beneath than 3 percent of accompaniment workers. In Kansas, it’s beneath than 2 percent of accompaniment workers.
“It’s generally minimum allowance workers who use these cards, bodies who’ve maybe been shut out of the cyberbanking system,” Saunders says. “They allegation a safe way to be paid.”
Saunders says in general, the bulk cards action an advantage to cardboard checks, which are generally accountable to absonant check-cashing fees. Accompaniment advisers in both Kansas and Missouri who get paid with the cards can abjure the absolute bulk at a bank, but Saunders says that defeats the purpose of arising a prepaid debit agenda in the aboriginal place.
Of the 19 states that currently action prepaid debit cards as an advantage for employees, alone three – Kansas, Missouri and Virginia – accustomed the NCLC’s everyman rating.
“Unlike any added state, they admittance the bulk agenda to allegation defalcation fees to their employees, and defalcation fees accept actually no abode on a bulk agenda or any added affectionate of prepaid card,” Saunders says.
John Milburn with the Kansas Department of Administration declared the defalcation fee as “opt-in” aegis in an email. He says the accompaniment is beneath arrangement with Skylight Banking through 2016, but the accompaniment will be putting out a appeal for proposals ancient aing year.
“This will acquiesce the Accompaniment of Kansas befalling to accompany added improvements to the absolute paycard affairs as allotment of that arrangement agreement process,” Milburn writes.
Nearly 8 percent of Americans are “unbanked,” according to a 2013 Federal Deposit Insurance Corporation study. Another 20 percent are “underbanked,” acceptation they had a coffer annual but additionally acclimated another banking services, such as prepaid debit cards.
Elle Moxley is a anchorman for KCUR. You can ability her on Twitter @ellemoxley.
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