Home / Articles / News / News / Paper vs. plastic
Print this Article
Thursday, July 16, 2009 10:10 am

Paper vs. plastic

Why are unemployed debit card users charged fees?

art6104

Pay poor tax of $15.

The directive no longer applies solely to Monopoly players — it’s also happening to Illinois’ unemployed workers.

Last fall, the Illinois Department of Employment Security, which pays state unemployment claims, abandoned the decades-old practice of issuing paper unemployment checks in favor of Visa debit cards.

Springfield-based Illinois National Bank was given the contract to administer the program. Under the agreement, INB is allowed to collect fees from users of the prepaid cards. The “chargeable transactions” at domestic banks range from 50 cents for balance inquiries and to call customer service to $15 for an overdrawn account.

Cardholders can avoid paying any fees by getting cash back at retailers but are charged 95 cents for each ATM withdrawal and can also incur surcharges at out-of-network cash machines — a problem for unemployed persons not living in or near Springfield, Chatham, Pleasant Plans, Riverton, Mt. Pulaski, Peoria, or Fairmount in Vermillion County. These are the only INB branch and ATM locations listed on the company’s Web site.

“It sounds like kicking people when they’re down,” says Lynda DeLaforgue, director of Citizen/ACTION of Illinois, which advocates on behalf of consumers and has lobbied to over the years to cap ATM fees.

An INB spokeswoman referred questions to the state, saying the bank was not authorized to speak to the media about the program.

Nor does the bank disclose how much is collected in fees. But the math isn’t difficult to do: just consider the state’s jobless rate of 10.1 percent, above the national average, or 671,368 people.

In all more than 30 states have struck similar agreements, typically with large national banks such as Wells Fargo, JP Morgan Chase, Bank of America and U.S. Bank. Other states, such as Oklahoma, use the same card system used for the state’s food stamp program.

A spokesman for the Illinois Department of Employment Security did not respond to an e-mail and phone message by press time on Wednesday.

Log in to use your Facebook account with
IllinoisTimes

Login With Facebook Account



Recent Activity on IllinoisTimes

Calendar

  • Thu
    31
  • Fri
    1
  • Sat
    2
  • Sun
    3
  • Mon
    4
  • Tue
    5
  • Wed
    6