Monday, July 01, 2013

Payroll Cards...Gouging Those Most Who Can Afford It Least.


What is this thing?

Well, it would appear that in an evil symbiosis gone wild, big employers have gotten together with big banks so that they can rob hourly wage earners of their wages when they try to get at their actual wages.


Here is the lede from Jessica Silver-Greenerg's and Stephanie Clifford's piece in this morning's NY Times:

A growing number of American workers are confronting a frustrating predicament on payday: to get their wages, they must first pay a fee.

For these largely hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by their employers. Employees can use these cards, which work like debit cards, at an A.T.M. to withdraw their pay.

But in the overwhelming majority of cases, using the card involves a fee. And those fees can quickly add up: one provider, for example, charges $1.75 to make a withdrawal from most A.T.M.’s, $2.95 for a paper statement and $6 to replace a card. Some users even have to pay $7 inactivity fees for not using their cards.

These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators.

Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card.

“It’s pretty bad,” he said. “There’s a fee for literally everything you do.”...

Mike the Mad Biologist, who has been on this for awhile now, points out that these things were actually test-marketed on even poorer people, meaning those using food stamps.

Which leads Mike to wonder if the middle class can be far behind.

This is an important story that matters to millions. Let's see how many newscycles it lasts.

For those not wandering over from Harvey O's place...Mr. Oberfeld has a solid piece up on how checks (not cheques) and balances are supposed to work in everyone's favour...



Anonymous said...

Bowser and Blue - I'm Glad I live in Canada

Anonymous said...

Anonymous said...

This is why unions are created. Greed of the wealthy.