Banks Skimming Money From Welfare Recipients, Making Millions In Fees

[JSt0rm]

article is older but funny So banks are taking more tax dollars in fees to welfare recipients. Where is the real welfare?

http://current.com/news/92727217_ba...elfare-recipients-making-millions-in-fees.htm

Banks are making nearly $1.5 million a month in fees by charging California welfare recipients to withdraw their benefits using ATMs and debit cards - an amount that has nearly doubled since 2008.

The sharp increase comes as Gov. Arnold Schwarzenegger's administration has made cracking down on fraud in the state's welfare-to-work program a priority, most recently by barring use of welfare debit cards at casinos and cruise ships after media reports revealed that nearly $70 million in benefits had been withdrawn outside the state since 2007.

Advocates for the poor say that while Schwarzenegger has rightly cracked down on such abuses, he has failed to curb another source of waste: escalating bank fees that take money from needy families and from the California businesses where that money would otherwise flow.

By the end of this year, they estimate, more than $38 million will have been transferred from poor families to banks in the form of ATM and debit fees over the past three years. For example, in 2008, according to state figures, banks collected $10.1 million in fees from welfare recipients; this year, they are on track to collect more than $15 million. In June 2008, recipients paid out $833,000; banks collected $1.44 million the same month this year.

Schwarzenegger has pushed for deep cuts to the welfare program and even proposed eliminating it altogether in his budget - ideas that were eventually rejected.

Mike Herald of the Western Center on Law and Poverty said that while the governor has used cases of fraud to argue for such policies, he has been "asleep at the wheel" when it comes to bank fees and other issues. In August, The Chronicle reported that a commission appointed by the governor knew about welfare access at cardroom ATMs since at least 2006 but failed to act until last year.

 

[Zebo]

Pfft that's nothing chump change. Banks stole 2 trillion from tax payers and about another 8 trillion in asset stripping through fraud. They launder and finance mexican drug cartels even. http://www.bloomberg.com/news/2010-...rtels-admitted-in-wells-fargo-s-u-s-deal.html

 

[101mpg]

Are these fees any different than what a normal account holder would be subject too? ie. I use a bank that reimburses my ATM fees each month so if I went on welfare right now could I use my existing account and not pay the fees or are they forced to through some other scam? If it's just the fact that people suck at banking I don't see how you could do anything about it anymore than you can stop them from spending their welfare checks at the casino or on booze and smokes...

 

[bfdd]

I <3 7-11 because Credit Unions don't have fees on their ATMs. BTW the fee thing is bullshit and the RAPE the consumer and businesses on these processing fees.

 

[Scotteq]

If the fees are the same for everyone, then there's no reason to complain. Just move your accounts to a bank that doesn't charge.

 

[DaveSimmons]

Or manage your finances better. Instead of making 10 ATM withdrawals a month and paying $15-45 in fees, make 2-3 withdrawals.

Of course if these people managed money wisely, many of them wouldn't be so poor.

 

[xj0hnx]

You shouldn't even be able to use a welfare card at an ATM to get cash, and if you do, and are charged the same fee for using the ATM that anyone else gets charged than you have no basis for complaint.

 

[werepossum]

Banks can certainly screw over customers, especially those with least money and the least sophistication. When banks did everything by hand, they sorted all the day's deposits and checks for each person, then entered the largest check, then the next largest check, and so on, entering the deposits last of all. Obviously it takes a LOT more time to do this rather than simply entering each transaction as you come to it, but the extra time paid off by maximizing overdraft penalties. I worked with one old man who had bounced half a dozen checks, generating at that time (mid-seventies) overdraft charges worth half his Social Security check (his only income.) The next month he wrote his normal checks, but more than half of them bounced due to the staging by value. The third and subsequent months his whole check was taken up immediately by stacked up overdraft charges as soon as it came in, so every check he wrote bounced and generated an overdraft charge. He eventually got someone to step in and stop the process on a hardship case, but an initial shortfall of less than half a hundred dollars generated several hundred dollars in overdraft charges for the bank and left him literally nothing for a couple months.

Hopefully this doesn't happen in today's computerized banking world, but I'm sure the same principle goes on with regards to welfare people. I'm sure a lot of it is their own fault as well; if you withdraw $20 five times at a place that charges a $5 fee and your bank then adds a $5 fee for using a "foreign" ATM, but you had the option of visiting a branch and withdrawing $100 without charge, it's hard to fault the bank for your lost $50. That's the price of convenience - or ignorance.

 

[bfdd]

werepossum, I agree but the fees they charge are quite fucking ridiculous. This is why I stick to the ATMs I know are free or I just go into my bank to get cash. Other than that, I'd rather not spend money as I hate using credit.

 

[JSt0rm]

So sounds like the majority of conservatives on these forums are for this hidden taxation?

 

[HumblePie]

werepossum, I agree but the fees they charge are quite fucking ridiculous. This is why I stick to the ATMs I know are free or I just go into my bank to get cash. Other than that, I'd rather not spend money as I hate using credit.

I rarely need cash and when I do, I get it as cashback when I need to buy something from the grocery store or something like that where I know it's free.

 

[DaveSimmons]

So sounds like the majority of conservatives on these forums are for this hidden taxation?

I'm only fiscally conservative, but it's hard to stop some people from paying stupidity taxes like unnecessary ATM fees they could have avoided by having a budget.

It's a self-inflicted wound so I'm not feeling much sympathy. Or feeling much need for a big-government nanny-state fix to "save" these people.

 

[JSt0rm]

I'm only fiscally conservative, but it's hard to stop some people from paying stupidity taxes like unnecessary ATM fees they could have avoided by having a budget.

It's a self-inflicted wound so I'm not feeling much sympathy. Or feeling much need for a big-government nanny-state fix to "save" these people.

So your ok with your tax dollars being funneled to banks via a stupid tax on poor people? I would think the easiest way to get rid of some of the welfare would be to stop this activity by the banks AND refund the money to the tax payers or use to to pay down debt. The banks are already collecting a 3% fee on the usage of these cards.

 

[xj0hnx]

So sounds like the majority of conservatives on these forums are for this hidden taxation?

Idiot, it isn't a "tax", they get the same amount of money whether they use an ATM and get charged a fee, or if they use the card to directly pay and don't. You are trying to make it into something it is not.

 

[pcgeek11]

Idiot, it isn't a "tax", they get the same amount of money whether they use an ATM and get charged a fee, or if they use the card to directly pay and don't. You are trying to make it into something it is not.

This.

 

[JSt0rm]

Idiot, it isn't a "tax", they get the same amount of money whether they use an ATM and get charged a fee, or if they use the card to directly pay and don't. You are trying to make it into something it is not.

One mans waste is another mans profit? Problem is this is tax payer waste.

 

[Zebo]

So sounds like the majority of conservatives on these forums are for this hidden taxation?

Funny thing poorer you are more fees you pay welfare or not.

I remember those and was never on welfare just seemed like it.

Now I'm doing okay and pay nothing for anything. Cashiers checks, Fedex documents of said checks to me when I'm away, etc etc etc. Our local bank president small 3 bank regional bank even takes me hunting.

 

[JSt0rm]

This.

durp.

 

[zinfamous]

So sounds like the majority of conservatives on these forums are for this hidden taxation?

How is it hidden?

 

[JSt0rm]

Funny thing poorer you are more fees you pay welfare or not.

I remember those and was never on welfare just seemed like it.

Now I'm doing okay and pay nothing for anything. Cashiers checks, Fedex documents of said checks to me when I'm away, etc etc etc. Our local bank president small 3 bank regional bank even takes me hunting.

Yup same here. I do use my credit card from time to time though. Also, everyone laughed at me for buying my car outright but I'm laughing paying $300 every 6 months for car insurance. This also makes me a careful driver ^_^

 

[bfdd]

But JSt0rm it's not a tax, it's a fine/fee!

 

[JSt0rm]

You guys are right. It's just a fee! A fee that tax payers pay!

What does it mean?

 

[bfdd]

You guys are right. It's just a fee! A fee that tax payers pay!

What does it mean?

It's a fee.

You're not going to see me argue that it shouldn't be lower because I do believe they rape us(consumers/small business) when it comes to these stupid little fees, but it's clearly a fee and not a tax. Unless you want to file it under the "stupid tax" along with the lottery and taking insurance when the dealer is showing an Ace.

 

[xj0hnx]

You guys are right. It's just a fee! A fee that tax payers pay!

What does it mean?

It's a fee to the recipient, not the tax payer, we already got milked out of that money, actually, our great, great grandchildren did, but that's another story.

It's means they shouldn't even be able to withdraw cash from a machine, and should only be able to directly pay bills with the taxpayers money.

 

[Zebo]

Yup same here. I do use my credit card from time to time though. Also, everyone laughed at me for buying my car outright but I'm laughing paying $300 every 6 months for car insurance. This also makes me a careful driver ^_^

As long as it was used Save 50&#37; off retail for basically a new car. No matter how much money I had I'd never buy new or comprehensive and collision insurance since that's a loser and makes insurance companies rich me poor as well.