Are The Unemployed Getting Ripped off by Banks?

How banks are making a buck off the unemployed.

When you are unemployed, looking for a job and trying to live on less than $200 a week, each dollar really counts. In order to receive unemployment benefits, applicants have to jump through several hurdles and look for a certain amount of jobs each week. The benefits are small, but for most people, it's better than nothing.

What is even more upsetting is that there are many banks that have actually found a way to get a couple of bucks from these people, who need their dollars the most.

Many states have started depositing weekly benefits onto a U.S. Bank prepaid debit card. This system prevents the state from having to issue actual checks and the recipients can begin using their funds right away, rather than wait until they can get to the bank to cash a check.

The prepaid card allow users to make up to four withdrawals a month free of charge. After that, each ATM visit cost $1.50 (in addition to any fees by the ATM owner) and if they need to visit a teller, they are charged $3. Along with the $17.50 overdraft fee, the bank is collecting a large percentage of the users money right off the top.

In 41 states, banks and other financial firms have contracts to provide access to public benefits through prepaid debit cards. Of course, it isn't just unemployed people who are having this problem. People who receive cash assistance, food stamps, social security and other benefits are also dealing with the same dilemma.

Banks have been under fire lately for the exorbitant fees. For example, Bank of America recently announced a $5 monthly fee for their debit card. Although their customers are angry about it, there isn't much they can do aside from pay it. The problem is, collecting high fees from the poorest of Americans is just wrong. These people already can't pay their bills and are trying just to survive; the last thing they should have to worry about is large banks trying to take $15 to $20 off the top. (Update: Bank of America has since rescinded the $5 monthly fee)

By doing this, the banks have found a way to make a profit off of the unemployed and those receiving public assistance. It's a great idea for them. The worse things get, the more money they will make.

When asked about these practices, U.S Bank simply said that people who receive unemployment benefits are clearly informed about the fees and that they provide a service that is convenient and economical.

I can't help but wonder just who it is convenient and economical for?

Do you receive any assistance on a prepaid debit card? Do you find that you have to pay a lot of fees just to access the money? Let me know your thoughts in the comments.

By Melissa Kennedy- Melissa is a 9 year blog veteran and a freelance writer for LogisticsJobsiteBlog and Nexxt, along with helping others find the job of their dreams, she enjoys computer geekery, raising a teenager, supporting her local library, writing about herself in the third person and working on her next novel.