Prepaid Debit Cards Rack Up Fees As Soon As You Even Think About Getting One

Using TurboTax to file his taxes last month, Sam chose an interesting new option for his refund: a TurboTax-branded Greendot prepaid debit card. He doesn’t have a bank account at the moment, and wasn’t receiving a huge refund, so this seemed like a good option. He tried to use up the card soon after receiving it in order to avoid the monthly “maintenance fees” that come with prepaid debit cards. What he didn’t know was his account really began on the day that he requested it online, so he was paying monthly fees when he had the card for barely a week.

He writes:

I did my taxes as soon as I got my W-2 back in February, using TurboTax for free, which didn’t cause me any real problems. When presented with my refund options I opted for this new TurboTax Card with Greendot because I no longer had a bank account since I’d abandoned Chase, so a direct deposit was out of the question and the money it would have cost me to cash the check somewhere wasn’t really worth it either for my $54 refund. In case you’re wondering why it’s so small, I’d spent the previous year in a government vocational training program where I was paid around 12 cents an hour.

I got my card activated it on their website on February 26th if I remember correctly. On February 28th my $54 were deposited on my card. On March 6th, I tried to make a purchase for which I had JUST enough money on my card; the vendor charged a $1 fee to verify the card, which for some unfathomable reason was declined, so they charged 2 more which remained ‘pending’ every time I checked my transaction history. Stupidly, I didn’t log in to my account for about two weeks.

Today, I logged in to check the status of my card because it’s getting to be near the time where this vendor would actually ship my items and charge me for it, to find a $5.95 ‘monthly maintenance fee,’ dated March 7, a little over a week after I activated my card. That fee hadn’t been there when I checked my transaction history on March 7, 8th, 9th, etc.

So I called customer service, and after being hung up on once, I finally spoke to [redacted] who refused to give me a refund when I explained the situation to him, and informed me that my card had actually been activated as soon as I’d requested it online, so even though I didn’t physically possess it, ‘activate it’ myself, or have any funds on it until almost a month later I was still being charged for that billing cycle. So I asked to close my account, which [redacted] agreed to do, but when I asked for email verification of this exchange, he refused, citing ‘security’ reasons (even though there’d been no problem with e-mailing me to notify me of my $54 direct deposit), so I asked to speak to his supervisor.

After 11 minutes on hold I finally speak to some woman whose name I forgot, get the same b.s. story, ask her to close my account, and kindly let her know about the report I will be sending to the Consumerist before hanging up.

And there we are. Tax preparation services also offered these cards last year, and now the IRS lets you accept your tax refund in plastic form. Just be sure that you know the rules, and keep a close eye on your account.

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