Stimulus Checks: Prepaid Debit Cards Come With Fees, Privacy Concerns

Around 4 million citizens had their stimulus checks sent as prepaid debit cards that come with fees, and some lawmakers are now expressing privacy concerns over the cards. According to CBS News, the Treasury Department directed that the prepaid debit cards be used as a way of getting coronavirus relief payments to Americans who had not previously provided direct deposit information to the IRS.

Now, Sen. Maggie Hassan of New Hampshire and 14 additional senators have sent a letter to Treasury Secretary Steven Mnuchin and IRS chief Charles Rettig, explaining that these types of cards have strings attached. For example, they often require fees for processing or money withdrawal, and they require that personal data be shared with third-party marketing companies. Additionally, the letter states that anyone who tried to transfer the money from the card to their regular bank account is forced to "navigate a complicated registration process and provide substantial personal information."

In an email to CBS MoneyWatch, Hassan stated his unease: "I am very concerned by issues that Granite Staters and Americans across the country have raised, including that they missed the debit card because they thought it was a scam, or that they are struggling to use their card without having to pay extra fees or giving out personal information." Hassan went on to say that she hopes the Treasury Department will address the issues and "ensure that Americans can get full access to the stimulus payments that they desperately need." Notably, there have been some cases of taxpayers throwing out their stimulus payment cards because they believed it to be junk mail.

Regarding the third-party marketers, the letter from the senators addresses an agreement that cardholders are expected to make, which they say "allows our constituents' personal information to be shared with third parties for marketing and other commercial purposes." The cards are issued by MetaBank and managed by Money Network Financial and require the cardholders to provide "significant personally identifiable information" in order to activate the card or transfer money. The cardholder agreement says that Money Network Financial "may disclose information to third parties about your Card account or the transactions you make" to "affiliates" and to "service providers." According to Hassan and the other senators, "this ambiguous language raises serious questions about whether Money Network Financial is permitted to sell personal information of individuals who activated stimulus payment debit cards."