Californians reluctant to cash in their inflation-relief debit cards: Here's why

ByMichael Finney and Renee Koury KGO logo
Saturday, December 3, 2022
Californians reluctant to cash in their inflation-relief debit cards
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The state of California turned over data for millions of Californians so companies in New York and Wisconsin could issue the cards and mail them out.

SAN FRANCISCO (KGO) -- 7 On Your Side reported how millions of Californians are getting their Middle Class Tax Refunds on debit cards. Many say it looks like a scam, and comes with too many fees. Now others say it puts their personal information at risk.

7 On Your Side FAQ: Answers to the most commonly asked Middle Class Tax Refund questions

Some recipients are wary because you must give six digits of your Social Security number to activate the card, which sets up an account at a New York bank. The card company is located in Wisconsin and their customer service is in Georgia -- so, who's got your information and what happens to it?

Al Ginsburg of San Francisco got his Middle Class Tax Refund loaded on a debit card, but he refused to activate it. "What do I do with this card?" he asked.

"You look on the back, it says call this number and give away six digits of your Social Security number," Ginsburg said.

Ginsburg says a scammer could use those six digits to steal his identity.

"Even a cave person could figure out how to do that, so it's not safe. So the idea is, don't use this card," he said.

Activating the card automatically opens an account at New York Community Bank -- which sent a notice along with the debit card. saying it does share information.

VIDEO: Californians get inflation relief payments, but confusion arises about cards, issuing bank

"They're gonna get our purchasing history as we use these cards, so this is all big business back there, and with my tax money and my numbers and my purchasing behavior," Ginsburg said.

He's not alone. Scott in San Jose writes: "I don't want an account at a New York bank -- how can I avoid it?"

Rolanda writes: "Do I either accept a bank's access to my information... or don't get a refund?"

"Who made the decision from our government in Sacramento? They couldn't find a decent bank in California?" asked Ginsburg.

The Franchise Tax Board is paying $25 million to Money Network of Wisconsin to provide debit cards for up to 13 million Californians. The New York bank issues the cards, with customer service department located in Georgia.

"I mean, you just lost control, put it on a silver platter." Ginsburg has vowed not to provide the six digits of his Social Security number.

However, he was shocked when we pointed out the companies already had his Social Security number. They also had his name, address and refund amount.

"How did they get all that personal information, who gave it to them?" he asked.

The state of California turned over data for millions of Californians so the companies could issue the cards and mail them out.

"The state of California? My government?" asked Ginsburg.

Money Network requires you to punch in six digits to verify you are the real cardholder, and not a scammer.

"This is absolutely a bonfire. It's a bonfire," said Ginsburg.

The Franchise Tax Board says debit cards are by far the fastest way to send money to millions of residents. Checks would take six months longer.

As for privacy concerns, the contract says the companies will not use your personal information for marketing purposes, despite the standard privacy notice saying New York Community Bank can share it. The account will also dissolve once you use up the funds, so you are no longer a customer.

Ginsburg took no chances. He called Money Network, which canceled his card and is now sending a check.

"Tell them you're not a robot and you're not a moron and you want a paper check," he said.

That's also in the fine print of the contract: you can call Money Network to cancel the card and it will send you a check. It takes a few weeks to get it. If you have issues with your debit card, let 7 On Your Side know about it.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

7OYS's consumer hotline is a free consumer mediation service for those in the San Francisco Bay Area. We assist individuals with consumer-related issues; we cannot assist on cases between businesses, or cases involving family law, criminal matters, landlord/tenant disputes, labor issues, or medical issues. Please review our FAQ here. As a part of our process in assisting you, it is necessary that we contact the company / agency you are writing about. If you do not wish us to contact them, please let us know right away, as it will affect our ability to work on your case. Due to the high volume of emails we receive, please allow 3-5 business days for a response.

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