New debit card sparks new worries about unemployment benefits

By: - June 30, 2021 6:15 am

Critics have called for state unemployment offices to eliminate prepaid cards entirely because they require more time and money from consumers. Nevada is one of only two states to offer no direct deposit program for unemployment benefits.

Nevada unemployment claimants—many of whom have already faced months-long delays to receive their benefits, and struggled to reach help from an office running on ‘vintage’ software—will receive their benefits through a new bank starting Thursday, and some are wary the change could leave them behind.  

Starting July 1, claimants will receive their benefits on Way2Go debit cards, issued by Comerica Bank, rather than the Bank of America cards the department has used since May 2016.

Way2Go is the interim debit card provider that DETR selected to replace Bank of America on short notice. “The state is currently creating an RFP to find a vendor that can solve many of the agency’s needs.

“This situation was unusual and we will soon be getting back to the regular order,” DETR said.

Nevada’s unemployment rate is recovering but still among the worst in the country. In May 2021, the unemployment rate was 7.8 percent, down over 16 percentage points from last May. It is still, as of May, the fifth highest rate in the country. The average unemployment rate in May nationally was under 6 percent.

DETR has said that Way2Go has been mailing out the new debit cards throughout June. Anyone on Nevada Unemployment Insurance (UI) with an open claim on file will receive a card in the mail, according to DETR, given that the claimant’s address is up-to-date.

Some claimants are concerned they won’t receive their cards before July 1.

Corey Bailey, who has been unemployed since March 2020 and is a moderator in the over 17,000 person Facebook Las Vegas unemployment support group, said he’s been trying to help members get their cards as concern grows about the approaching deadline.

Bailey was initially worried his own card wouldn’t arrive in time, and when he hadn’t heard anything last week, he started calling Way2Go. A representative told him they hadn’t sent his card, and it’d be a $15 fee to expedite a new one, which he agreed to. In subsequent calls over the next few days, agents gave conflicting information about whether his original or expedited cards had in fact been sent, and what the fee would be, Bailey said. 

He received his Way2Go card Monday.

Several members of the Facebook support group, he said, were receiving varying guidance, too.

“People are starting to get really frustrated and confused because you’ve got a lot of mixed information,” Bailey said. He has heard people quoted $12, $13, $13.50, and $15 for expedited shipping. He is concerned with the “lack of organization,” and said many members still haven’t gotten their cards.

Comerica Bank, which issues Way2Go cards, directed the Current to a customer service agency, Conduent, which directed the Current to DETR.

DETR said “All active claimants were (and continue to be) mailed via USPS their new cards throughout the month of June, at no cost to them. Generally, the post office delivers mail within 7-10 business days, however delays are possible. Some claimants called to check the status of their card and chose to request a new card expedited to them for a fee. Way2Go also replaces lost cards for free.”

“DETR doesn’t anticipate payment delays, however, there could be delays in a claimant receiving their new card in the mail,” they said.

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Many states offer direct deposit as an alternative to prepaid debit cards, in part to avoid the very fees Bailey encountered.

Nevada is one of only two states to offer no direct deposit program for unemployment benefits. The other is California; Maryland just adopted direct deposit in April.

For years, consumer advocates have been pushing for direct deposit.

In a 2011 National Consumer Law Center report, managing attorney Lauren Saunders argued that states should eliminate prepaid cards entirely: they should use direct deposit as the primary option, and checks as the alternative.

Prepaid cards can require more time and money from consumers, Saunders wrote. Debit card fund transfers can be delayed by days. Banks charge servicing fees, and out of network ATMs charge fees, as well. 

For Way2Go, there is a $1 fee for ATM withdrawal out of network, a $12 fee for expedited card replacement—one of the numbers Bailey was quoted to expedite his card—and a .50 fee for each one-time transfer to a US bank account. There is no fee if the claimant sets up recurring transfers. 

DETR said that PUA claimants can already use direct deposit because it is a federal program, and others might be able to access direct deposit in the future:  “In the planned future modernization of the UI system, claimants will be able to receive benefits via direct deposit.”

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The DETR website was updated last Friday to add that cards might not appear until the first week of July. Those who haven’t received the new card by July 9 are directed to contact Way2Go.

Tuesday, Jun 29 was the last day to file a claim to receive benefits through the current Bank of America Card. DETR most recently posted that claims filed after June 30 will be deposited into the new Way2Go card, so those without a card from July 1-9 won’t be able to access benefits during that period.

(This story was updated to include comments from DETR)

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Clara Bates
Clara Bates

Freelance correspondent Clara Bates is a former Nevada Current intern from Las Vegas and currently living in Cambridge, MA.

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