Unemployment Can Cost

In a steadily shrinking economy, unemployment benefits are critical for workers receiving pink slips. But some banks view such benefits as an- other potential revenue stream and are charging thousands of jobless people fees to access their unemployment money.

• Laid-off engineer Arthur Santa-Maria, 57, of Belen, N.M., found that out when he called Bank of America with a question about the debit card that held his more than $300-a-week unemployment benefits. He was charged 50 cents for a query about his balance, and $1.50 for making two withdrawals in one day.

• Bank of America says its fee schedule is consistent with what other banks charge for such cards. But Santa-Maria, who tried unsuccessfully to get direct-deposit payments, says those fees hurt when "I'm scrambling just to make ends meet."

• New Mexico is one of 30 states using banks and credit card companies to disburse unemployment benefits via debit cards, along with direct deposit. Officials say debit cards help reduce costs of postage, paper and processing; the savings for New Mexico are reportedly up to $1.5 million a year.

• "These types of programs are designed to save the states money and provide recipients added convenience without added expense,"says Nina Das, spokeswoman for Citi, which facilitates benefits on prepaid cards in Kansas and Maryland.

• But Santa-Maria is still caught in the middle."Now they're charging me money to get to my unemployment money," he says."That's wrong."

AARP News April 2009