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Employees Increasingly Paid by Prepaid Cards


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44 replies to this topic

#31 willardhaven

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Posted 12 July 2013 - 07:02 PM

There is not a slew of fees attached to a paycheck. 

 

Employees are clearly getting charged a bunch of fees for using their card. Do you think there might be a disclosure problem? Maybe they can't access a bank. ATMs only deal in $20s for the most part. I guess the employees could carry around a check register with them to keep track of things...

 

How does the inactivity fee work? They might be charging these people for not using the debit function. You seem to like hypothetical situations so there you go.

 

Once again I am fine with this being an option. It should not be allowed as the default option. Employers should not be able to forget to mention conventional checks or direct deposit if those are available.


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#32 UncleBob

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Posted 12 July 2013 - 07:05 PM

If they can't access a bank, then how do they cash the paper check?
"The ultimate weakness of violence is that it is a descending spiral, begetting the very thing it seeks to destroy, instead of diminishing evil, it multiplies it."

#33 willardhaven

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Posted 12 July 2013 - 07:08 PM

You just mentioned check cashing businesses. They might be able to sign over their check at the food store as well.

 

Hell, growing up my employers used to cash paychecks for me free of  charge.


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#34 UncleBob

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Posted 12 July 2013 - 07:10 PM

...and then, pay a fee to cash the check? Which is one of the things you say you're against...
"The ultimate weakness of violence is that it is a descending spiral, begetting the very thing it seeks to destroy, instead of diminishing evil, it multiplies it."

#35 willardhaven

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Posted 12 July 2013 - 07:16 PM

You're going around in circles. Check cashing fees are pretty well established. They are not hidden although they are highly abusive of low-income workers and their neighborhoods.

 

The point is that these cards are a vessel for a large amount of fees. They are not all clear-cut and they add up to a significant amount. So much so that local governments are taking notice and reviewing the practice.

 

I believe McDonald's stopped forcing them on employees after the lawsuit started.

 

I don't think people should have to pay abusive fees. Checks are not abusive monetary instruments. Some of these pay cards are.

 

So you have stated you support them, I have stated why I do not... why do you keep dragging this thread out?


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#36 UncleBob

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Posted 12 July 2013 - 07:22 PM

...because you keep replying to me with questions?

The cards are only "a vessel for a large amount of fees" if you use them that way. If you empty the balance of the card at the end of each pay period, then no harm, no foul, right? (and any card that doesn't allow you to do that is something I do not support).
"The ultimate weakness of violence is that it is a descending spiral, begetting the very thing it seeks to destroy, instead of diminishing evil, it multiplies it."

#37 willardhaven

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Posted 12 July 2013 - 07:34 PM

I would gather you cannot get the balance off the card each week if you are using an ATM. They are confusing and seem to be profitable for their administrators.


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#38 UncleBob

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Posted 12 July 2013 - 07:56 PM

Don't use an ATM. Easy-peasy.

I can't take my paper check to an ATM and get cash from it.
"The ultimate weakness of violence is that it is a descending spiral, begetting the very thing it seeks to destroy, instead of diminishing evil, it multiplies it."

#39 willardhaven

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Posted 12 July 2013 - 08:06 PM

Can you take one of these to the check cashing place? If you can't, how do you feel about that?

 

As I understand, you have a problem with these being the only pay option without direct deposit as an alternative, correct?

 

How do you feel about improper disclosure of the fees charged?


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#40 UncleBob

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Posted 12 July 2013 - 08:25 PM

1) I don't know - I've never personally used a payroll card or a check cashing place.

2) I have no problem with them so long as the employee can take the card to any reputable financial institution and receive the entire balance of the card (minus whatever fee the individual institution may charge, just as they do with a check) and if doing this every pay period does not trigger any additional fees or penalties. This can be offered as a part of a combination of other offerings (cash, paper check, direct deposit) or can be the singular offering, so far as I'm concerned. As for all the other fees (additional fees for using an ATM, paying bills with the card, etc.) - if you don't like them, don't use those services.
*edit* - also not a fan of inactivity fees on the card based on the idea that the checks never really expire and that employers must reissue checks for infinity... but I have an issue with that idea as a whole.

3) Depends on what you're defining as "improper disclosure". If it's "I didn't read the pamphlet that came with it", then I'm not really that concerned about it. If it's "I read the pamphlet and it didn't say anything about getting charged every time I called this 800 number to get my balance." or "I didn't get any kind of pamphlet at all.", then I do take issue with that.
"The ultimate weakness of violence is that it is a descending spiral, begetting the very thing it seeks to destroy, instead of diminishing evil, it multiplies it."

#41 willardhaven

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Posted 12 July 2013 - 08:30 PM

What about McDonald's offering only the card, which may include a fee even if you take it to your own bank for deposit?

 

I don't know what the pamphlets look like, I don't eve know if they give you a disclosure booklet.


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#42 willardhaven

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Posted 12 July 2013 - 08:36 PM

*edit* - also not a fan of inactivity fees on the card based on the idea that the checks never really expire and that employers must reissue checks for infinity... but I have an issue with that idea as a whole.

 

 

Checks are subject to the discretion of bank policy. Most of them adhere to the "90 days" notes on the checks but the check is still valid. Employers turn money over to the state that they can't pay after making a reasonable effort. I don't know where you got the infinity idea from. If you lose your check and forget about it, your employer does not get to keep the money.


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#43 UncleBob

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Posted 12 July 2013 - 08:45 PM

What about McDonald's offering only the card, which may include a fee even if you take it to your own bank for deposit?


Is the fee charged by the card for taking the money off of it? If so, do not like.
Is the fee charged by the bank for perfmorning the transfer? If so, get a better bank.

I don't know what the pamphlets look like, I don't eve know if they give you a disclosure booklet.

 
The one I've seen is an entire booklet full of information no one ever reads.
"The ultimate weakness of violence is that it is a descending spiral, begetting the very thing it seeks to destroy, instead of diminishing evil, it multiplies it."

#44 willardhaven

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Posted 12 July 2013 - 09:00 PM

I don't think we're that far apart on the matter honestly.

 

Though I dislike the idea forcing an employee to become a customer of a specific bank just to get paid, I am not sure if it's illegal.

 

On a personal level, I have seen how annoying the state-issued debit cards are, but they allow for direct deposit in order to avoid the nuisance.


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#45 UncleBob

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Posted 12 July 2013 - 09:08 PM

Agreed. I don't think either one of us has an unreasonable position.

A lot of my personal dealings (not in 'I have used one', but 'I've dealt with people who have used one') comes out of my employer, who offers the cards, direct deposit, or paper check (there was a short period where they were saying we could no longer get a paper check, but apparently they can't do that in Illinois, so went back to offering them, but they strongly encourage the card or deposit.

Obviously, this wouldn't work for a lot of businesses, but at my employer, you can take the card directly to the front desk and get the entire balance off-loaded, with no fees or charges. For the un-banked, it's better than a check, since you can come in at midnight on payday and get your money. I have direct deposit and I can't even do that.

I think that's why I'm a little more willing to accept them (based off what they *can* be)... it has the potential to be a pretty straight-forward process.
"The ultimate weakness of violence is that it is a descending spiral, begetting the very thing it seeks to destroy, instead of diminishing evil, it multiplies it."