NYT: Paid via card, workers feel the sting of fees

[Winehole23]

A growing number of American workers are confronting a frustrating predicament on payday: to get their wages, they must first pay a fee.


For these largely hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by their employers. Employees can use these cards, which work like debit cards, at an A.T.M. to withdraw their pay.
But in the overwhelming majority of cases, using the card involves a fee. And those fees can quickly add up: one provider, for example, charges $1.75 to make a withdrawal from most A.T.M.’s, $2.95 for a paper statement and $6 to replace a card. Some users even have to pay $7 inactivity fees for not using their cards.


These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators.


Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card.
“It’s pretty bad,” he said. “There’s a fee for literally everything you do.”


Certain transactions with the Chase pay card are free, according to a fee schedule.


Many employees say they have no choice but to use the cards: some companies no longer offer common payroll options like ordinary checks or direct deposit.

http://www.nytimes.com/2013/07/01/business/as-pay-cards-replace-paychecks-bank-fees-hurt-workers.html?_r=2&

[InRareForm]

Fuck jpmorgan

[boutons_deux]

excellent reason for a national non-profit public retail/commercial bank in direct competition with the TBTF monster banks.

[Biernutz]

And the big mega banks wonder why everyone hates them......GREED....

[boutons_deux]

Predatory creditor: Capital One sued half a million of their own cardholders per year during the recession

Several years ago, Capital One gave Oscar Parsons, 46, his first credit card. At the time, he didn’t need a loan. But he banked at a Capital One branch near his Bronx apartment, and when it was offered, he thought, “Why not?”

Initially, he had little problem keeping up with the payments. But after a run of construction jobs came to an end, he fell behind and found himself ducking the bank’s collections calls, he said. Each time the company’s TV commercials popped up, asking, “What’s in your wallet?” Parsons thought: “It’s not enough to pay you back.”

This year, Capital One provided Parsons with another first: his first lawsuit. For failing to pay his $1,800 debt, the company took him to court. Currently on public benefits and in a job training program, Parsons has nothing Capital One can take. But should Parsons find work, Capital One could use a court judgment to seize money from his bank account or take a portion of his wages.

It was a hard lesson — one learned by hundreds of thousands of the bank’s cardholders. No lender sues more of its customers than Capital One, according to ProPublica’s review of state court data.

Over the past year, ProPublica has sought to illuminate the scope of debt collection lawsuits, which, though they are often filed by public companies in public courts, are a largely hidden part of the nation’s financial life. The suits hit workers who earn below $40,000 a year the hardest (http://www.propublica.org/article/unseen-toll-wages-of-millions-seized-to-pay-past-debts/) and federal garnishment laws provide scant protection (https://www.propublica.org/article/old-debts-fresh-pain-weak-laws-offer-debtors-little-protection). Even workers near the minimum wage could have a quarter of their take-home pay taken or their bank accounts cleaned out. State laws typically offer little more protection.

To identify which companies file the most collection suits, ProPublica obtained and analyzed court data from 11 states. In every state, Capital One stood out.

During the years of the recession, particularly 2008 through 2010, when the number of credit card defaults surged, many banks filed more lawsuits. But Capital One dwarfed them all, reaching levels never matched by any company before or since, according to ProPublica’s review of data going back to 1996.

By our estimate, the suits exceeded half a million per year nationally during those peak years.

http://www.rawstory.com/2015/12/predatory-creditor-capital-one-sued-half-a-million-of-their-own-cardholders-per-year-during-the-recession/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheRawStory+%28The+Raw+Story% 29

[boutons_deux]

At Capital One, Easy Credit and Abundant Lawsuits


https://www.propublica.org/article/at-capital-one-easy-credit-and-abundant-lawsuits

[DMX7]

It makes me sad dat my boi, Sam L. Jackson, is their spokesman in many commercials.

[boutons_deux]

Law Firm Must Pay $3.1M For Operating Automated Debt-Collection Lawsuit “Factory”

A Georgia-based law firm behind hundreds of thousands of debt-collection lawsuits, and its principal partners, have agreed to pay a total of $3.1 million in penalties to settle federal accusations that they were operating a lawsuit mill in violation of the law.

In July 2014, the Consumer Financial Protection Bureau sued Frederick J. Hanna & Associates — a law firm that specializes exclusively in debt collection actions — and its principals, alleging that they relied on deceptive court filings and faulty evidence to churn out lawsuits.

According to the complaint [PDF (https://consumermediallc.files.wordpress.com/2015/12/201407_cfpb_complaint_hanna.pdf)], the firm used the court system for purposes of intimidation to coerce consumers into paying debts that often could not be verified or may not be owed.

Hanna & Associates filed hundreds of thousands of lawsuits on behalf of its clients — including JPMorgan Chase, Bank of America, Capital One, and Discover.

“To produce so many lawsuits, the Firm operates less like a law firm than a factory,” reads the complaint. “It relies on an automated system and non-attorney support staff to determine which consumers to sue.”

Thesenot-lawyers at Hanna would, according to the CFPB, “produce the lawsuits and place them into mail buckets, which are then delivered to attorneys essentially waiting at the end of an assembly line.”

Meanwhile, the actual attorneys at the firm were only expected to spend “less than a minute reviewing and approving each suit.”

The CFPB investigation found that one attorney at the firm signed over 130,000 debt collection lawsuits over a two-year period, equating to about 1,300 lawsuits a week.

http://consumerist.com/2015/12/28/law-firm-must-pay-3-1m-for-operating-automated-debt-collection-lawsuit-factory/

[DMX7]

Paying employees on those cards with no other options should be illegal. The companies that do it are usually paying low wages to begin with, and now they're trying to burden their employees even more with these fee loaded cards. That's one reason why we need a CFB that works.