Why Your Employer Really Wants To Pay You With A Prepaid Debit Card

[xchrom]

http://www.businessinsider.com/paycheck-on-prepaid-debit-card-2013-9



***SNIP

The result is that workers end up paying a variety of expensive, poorly disclosed, and difficult-to-avoid fees, ranging from charges for using the card infrequently, for balance inquiries, and for using out-of-network ATMs.

Here's a list of fees from The New York Times, for NetSpend, the largest issuer of these cards:

"On some of its payroll cards, NetSpend charges $2.25 for out-of-network A.T.M. withdrawals, 50 cents for balance inquiries via a representative, 50 cents for a purchase using the card, $5 for statement reprints, $10 to close an account, $25 for a balance-protection program and $7.50 after 60 days of inactivity."

With such fees, it's no wonder that issuers are inclined to offer savings and favorable contracts to get employers to use these cards.

The law states that companies can't force employees to use these cards. But they can still automatically enroll workers without advertising that there are other options available, and make them jump through hoops to get a check instead.



Read more: http://www.businessinsider.com/paycheck-on-prepaid-debit-card-2013-9#ixzz2esGrEEen

[Igel]

1. Yeah, that's where the reporter slips a cog.

The reason given: Employers save money.

The reason the reporter wants you to think: Somehow all those fees charged by NetSpend get funneled back to the employer.

What the reporter fails to do: Actually say that the fees get funneled back to the employer.

Can't find squat on the NetSpend site about the standard contractual terms. Perhaps the employer pays a fee to NetSpend. Perhaps no money changes hands. Perhaps NetSpend pays the employer for the contract. I can't tell. And I really dislike being left believing whatever assumption I want to believe receives the imprimatur of the reporter because that's just nonsense. The reporter has a responsibility to inform, not to hint, suggest, cause to infer, etc. Epic fail.

Still, there should be an option. Paperless is fine, but give options. If I decided to go paperless and was told to give an paper option, I'd open a cash window on payday with 1 hour the following Tuesday for those who missed payday. Let them have their money as cash and sign for it.

[dsc]

4. regardless the employer isn't paying the entire cost of the card

so they are shifting to employees part of the cost of issuing payroll.

[marmar]

2. k/r

Gotta make sure all the vultures get some carrion.

[doc03]

3. It is sort of a modern day version of the old

company store and company script they had in mining and steel mill towns back in the day.

[gopiscrap]

5. fucking business assholes this shit should be illegal nationally and it is another

reason why I feel all businesses should be nationalized.

[safeinOhio]

6. Just make them pay in cash.

Make that a required legal option.

[dixiegrrrrl]

7. They are also betting people are won't or can't

withdraw all their money from the card and deposit in a checking account or use the cash to pay bills.

As of this year, Soc. Sec. also went to card payments for those who did not sign up for direct deposit.
And similar fees apply to those cards.

[MineralMan]

9. That's what I'd do. I'd dump the entire balance of the card into

my checking account at my first opportunity. Fortunately, all of my clients make direct deposits to my account when they pay my invoices. Easy for them, and a no-brainer for me. No checks to deposit, and no checks to write for my clients. When they find out how easy it is to set up, they jump at the chance.

[CrispyQ]

8. Everything for profit. Someone's gotta get their goddamned finger in the pie.