"How Bank Of America Could Take A Chunk Of Some Americans’ Tax Returns"
Back in November, we noted how Bank of America was raking in millions of dollars in fees by contracting with states to put unemployment benefits on BofA debit cards. By using those cards, people can get hit with all manner of charges — including ATM fees — when they attempt to access their benefits. One woman estimated that she had paid $350 just to withdraw her own unemployment benefits.
And it’s not only unemployment benefits that are now being loaded onto pre-paid debit cards, giving BofA the chance to reap a profit on a public service. As Logan Smith at the Palmetto Public Record noted, BofA could also be cashing in on tax returns that have been loaded onto debit cards in South Carolina:
The state Department of Revenue announced the program back in December, but conveniently left off the long list of fees which customers without BofA accounts will be subject to.
For every withdrawal from a non-Bank of America ATM, BofA will take $2.50 off the top — in addition to any fees the ATM owner might charge. Want to get your money directly from the bank? The first time’s free, but every withdrawal after that comes with a $10 fee. Leaving the country? Bank of America takes 2% of every single transaction you make outside the United States. [...]
Bank of America didn’t have to bid for the program, according to a Department of Revenue spokesperson who told Palmetto Public Record the state chose BofA over South Carolina-based banks because “they were the best fit.”
As Smith also pointed out, BofA doesn’t even bother charging South Carolina to provide this particular service, figuring it can make its entire profit off of fees and interest. Additionally, the program is opt-out, meaning unwitting South Carolinians are automatically signed up to fork over some of their tax return to the nation’s second largest bank.
BofA already had to quickly backtrack when it proposed a monthly debit card fee, and fees are currently the number one reason that millions of Americans are moving their money out of the nation’s biggest banks.