(WHDH) — It’s an up-and-coming way to get your paycheck, on what looks like a credit card. This year, employers are expected to load nearly 50 billion dollars in employees’ wages on what’s called “pay cards.” But as 7-Investigates found— there are some pay card pitfalls you need to know. Hank Phillippi Ryan has the story.
Raven is very busy.
She’s a mom, a college student and a server at a New Hampshire restaurant.
“I’ve been working insane hours while finishing my degree,” Raven said.
She earned $1000 in wages and tips.
But in a matter of seconds that hard-earned money was gone. “I was devastated, I was stressed out,” Raven said.
What happened?
Raven says the restaurant where she works insisted on paying her with a prepaid debit card. These “payroll cards” or “pay cards” are getting more popular because companies save money by not issuing paper checks.
“Did they ever offer you an alternative method of payment?” Hank asked.
“They did not,” Raven said.
Every time Raven moved money from her pay card into her bank account there was a $3 fee.
So, she let the amount of money on her prepaid card grow to a thousand dollars.
“That’s a lot. That’s my car payment. That’s money toward my rent,” Raven said.
Then she got a notification that $950 from her card had been spent. But she didn’t buy anything.
“I was watching the money come out of my account. So, I’m panicking,” she said.
She immediately called the bank that issued the card and filed a fraud report.
“I did not make these transactions. They are clearly fraudulent,” Raven said.
The bank denied her claim.
“This is money I worked my butt off for that’s just gone. And then I’m being told that there’s nothing they can do. It’s just gone. I was anxiety-ridden,” Raven said.
All of Raven’s anxiety could have been avoided if she had been told she had a choice on how to get paid.
We found out New Hampshire workers can refuse pay cards and choose to be paid by check or cash.
And if they do opt for a pay card, they can’t be charged a fee for accessing their money.
“A worker should not have to pay to get their paycheck?” Hank asked.
“Correct. They work. They get paid their wages. They shouldn’t have to pay a processing fee to recoup those wages,” Rudolph W. Ogden III, Deputy Commissioner of the New Hampshire Department of Labor said.
We contacted the bank that issued Raven’s card. Though they would not give us any information why they soon sent Raven this refund check.
“It really means a lot to me that you guys worked so hard and investigated because now I got the help I needed,” Raven said.
The restaurant where Raven works did not respond to our request for comment. The New Hampshire Department of Labor is now looking into her case.
If you work in New Hampshire and have a question or concern about pay cards, contact the NH Department of Labor.
If you work in Massachusetts, the attorney general’s office says there needs to be a way for employees to access their full pay without being charged a fee.
The Massachusetts Wage Act (M.G.L. c. 149, Section 148), does not prohibit payment by debit card, nor does the statute specify the way an employee must be paid. That said, the employee must be able access their wages without incurring charge(s) and in full (i/e there must be a way to withdraw the cents) and they must receive a contemporaneous paystub (can be provided electronically but must be printable and employees must have access to printer, at no cost to the employee).
If you have questions, you can call the AG’s Fair Labor Division hotline: 617-727-3465. If you are being charged a fee, you can file a complaint at www.mass.gov/ago/fld
The Federal Trade Commission has information on your rights if your pre-paid debit card is lost, stolen or you get hit with fraudulent charges. Be sure to report the losses immediately, if you wait too long you could lose all your money.
You can also file a complaint with the Consumer Financial Protection Bureau if you are having trouble with a pay card.
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