For millions of Americans, a federal incentive of up to $ 1,200 per person was the most anticipated payment of the year.
But not everyone received their money the same way. First paid Americans usually received their money through a direct deposit, while others received paper checks by mail. The government also tried something new: sending payments to some recipients using prepaid debit cards.
Now a group of lawmakers on Capitol Hill is expressing concern about these debit cards.
Incentive payments were approved by Congress with the $ 2 trillion CARES Act. Individuals can receive up to $ 1,200, and couples – up to $ 2,400, plus $ 500 per child under the age of 17 if they are within certain income thresholds.
According to the Treasury, about 4 million Americans will receive their incentive payments using a debit card. In total, it is planned to deploy at least 171 million incentive checks. To date, the government has sent about 160 million payments.
A group of Democratic senators led by Maggie Hassan, D-N.H.; Sherrod Brown, Di Ohio; and Jack Reed, D-R.I., sent a letter to the Treasury and IRS last week about debit cards.
Senators wrote that the Treasury did not notify Americans who would receive debit cards about how their payment would be sent.
Since debit cards come in plain envelopes with the words “Money Network Cardholder Services,” many people did not recognize the payments and may have thrown them away.
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Senators also complained about the high fees for replacing lost cards. While the IRS refused a fee of $ 7.50 for replacing a lost card, which usually takes 7 to 10 days, getting a new card would cost you $ 17 earlier.
“We are seriously concerned about the introduction of these fees for people who urgently need direct cash assistance, which they are entitled to under the CARES Act,” lawmakers wrote.
Other fees related to debit cards may also apply. This includes $ 2.00 for each cash withdrawal from an offline ATM and $ 5.00 for non-prescription cash withdrawals.
Senators also expressed concern about the amount of personal information that recipients must provide to their debit cards. According to lawmakers, just to register their cards, people need to provide “substantial” personal data.
U.S. Treasury Secretary Steven Mnuchin shows a debit card that was used to distribute Covid-19 funds during a cabinet meeting in the eastern room of the White House in Washington, DC, May 19.
Kevin Ditch | Bloomberg | Getty images
“This burden is all the more due to the fact that these individuals did not request a prepaid debit card and cannot request the preferred method of receiving incentive payment at the IRS,” the senators wrote.
In addition, lawmakers have expressed concern that this personal information may be shared with third parties for marketing or other commercial purposes.
The cards are issued by MetaBank N.A., a financial agent for the Treasury Department, and are managed by Money Network Financial, LLC.
In order to activate their cards and transfer their money, people must disclose personal financial information.
“The agreement with the cardholder says that Money Network Financial” may disclose information to third parties about your card account or transactions that you make “with affiliates” and “service providers,” the senators wrote. “This controversial language raises serious questions about whether Money Network Financial is allowed to sell the personal information of individuals who have activated debit cards to stimulate payments.”
Senators ask Treasury and IRS officials to clarify how the debit card program works, including how recipients were determined, how fees were determined, and how recipients’ personal financial information can be transmitted.
Among the other senators who signed the letter are Mark Warner, D-Va.; Sheldon Whitehouse, D-R.I.; Angus King, I am Maine; Tammy Baldwin, D-Wisc.; Elizabeth Warren, D-Mass.; Richard Blumenthal, D-Conn.; Ointment Hirono, D-Hawaii; Ed Markey, D-Mass.; Chris Van Hollen, D-Md.; Tina Smith, D-Minn.p Amy Klobuchar, D-Minn.; and Jeanne Shahin, D-N.H.
This is not the first time lawmakers on Capitol Hill have expressed concern about debit card payments. In May, members of the House and Facilities Committee also sent a letter to the Treasury, caused by confusion caused by debit cards.