Glitches, Fees Hinder Unemployment Payments

At a time when every penny counts in the family budget, Californians who get unemployment benefits are facing unanticipated barriers to getting their money.

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Dozens of San Francisco Bay Area workers tell NBC Bay Area their unemployment payments are missing -- even though they were approved for benefits weeks ago.

Christopher H. in Concord has been waiting since March 13.

"When I log into my profile on the EDD website, it says my claim is active, and it gives me my total benefit amount," he said. "However, I haven't seen any money, and I don't know why."

He's not alone. Of the hundreds of NBC Bay Area viewers who have called, emailed, and messaged us with unemployment complaints, many say they have no idea where their money went.

Stacey Wulkan, a sales director for a travel agency, is among those who recently found themselves out of work. With planes parked, hotels closed, and vacationers staying home, Wulkan's business dried up.

"I'm currently furloughed," she said.

Wulkan is now collecting unemployment -- after tipping NBC Bay Area off to an ongoing glitch.

The California Employment Development Department, or EDD, offers benefits by check or debit card. Direct deposit is not an option. The EDD website says users will get their money 'sooner' with a debit card. Wulkan said she waited weeks for her card, and got nothing. When she called EDD, she was surprised by what the operator said.

"Eight years ago was the last time I claimed unemployment," Wulkan said, "and EDD was putting my payments on this eight-year-old, expired, non-existent card that -- I don't know if I threw it out, or what -- so, I had no access to it."

Wulkan requested a replacement card, then transferred the money to her bank.

"It took about a week to get it," she said.

Twitter, Facebook, and our NBC Responds inbox are full of complaints from other workers in the same boat -- finding their money has been parked for weeks, without their knowledge.

Tracking Down Old Debit Cards

Pictured: a sample EDD debit card. (Credit: Bank of America)

Bank of America runs the debit card program. It recommends users check its special EDD website to see if there's an old debit card with your new benefits on it. They'll replace it for free. Click here to learn more: https://prepaid.bankofamerica.com/EddCard

The EDD says an unemployment debit card is "...valid for three years from the date it is issued." So, how could money be deposited onto a card like Wulkan's, issued eight years ago? We asked Bank of America. It said an underlying account remains active, even if a card expires. It explained that it is proactively issuing replacement cards to some people, though it declined to say how many.

A spokesperson stressed: Bank of America is not earning any interest on money that's sitting idle. And, to help workers solve the mystery of the missing benefits, the bank says it has increased phone bank staffing tenfold.

Fees for Some Transactions

As NBC Bay Area looked closer at the Bank of America unemployment debit card, we found something else: fees. The bank's fee disclosure lists several possible fees for using EDD unemployment debit cards. The fees include a $1 ATM fee for transactions at non-Bank-of-America ATMs (you get two free per deposit), a $15 emergency transfer fee, and a $10 "express" card replacement fee.

"This is for people who lost their jobs," Wulkan said. "I don't think there should be any fees at all."

The fees are part of Bank of America's contract with the State of California. Consumer advocates have applauded California for fewer fees compared to other states. Still, it's a lot of money. The National Consumer Law Center said California workers paid nearly $2 million in EDD debit card fees in 2013 alone, when unemployment was around nine percent:

Even well-designed prepaid cards impose costs on workers, though the price is likely lower than the cost of cashing paper checks. In California, which continues to have the best card in our survey, workers paid nearly $1.8 million in fees in the past year, not including ATM surcharges. Thus, offering workers the choice of direct deposit remains important even for prepaid cards with the fewest fees.
- National Consumer Law Center, "2013 Survey of Unemployment Prepaid Cards"

Right now, unemployment is perhaps approaching 20 percent. Michele Evermore, a consumer watchdog with the National Employment Law Project, says she suspects today's workers will give up much more than $1.8 million in fees.

"This is a huge windfall for Bank of America," Evermore said.

Consumer advocates like Evermore are calling on the bank to immediately end the fees.

"Workers who are unemployed need the money," Evermore said. "They shouldn't be paying fees to large financial institutions, and direct deposit should absolutely be an option for workers."

We asked Bank of America about the fees. A spokesperson responded. "We are waiving express delivery fees for replacement cards," they said. "We are pleased to support the state of California in their efforts to provide these critical funds to millions of residents during these unprecedented times."

We asked EDD about the fees, debit card issues, and direct deposit. Late Friday, an administrator said the agency is working to get answers for us. We will update this story as new information becomes available.

Wulkan says she'd prefer EDD offer electronic funds deposits, rather than only a debit card or paper check.

"I think direct deposit would be easier," she said. "It's one less step."

Getting Around the Fees

EDD debit card users can avoid fees. Start by setting up recurring transfers from the unemployment debit card to your own bank. Bank of America says there's no fee for that, even if you're not a BofA customer.

Make sure you transfer every cent. Any unused balance will eventually be returned to the state. Bottom line: use it or lose it.

You can also use the debit card fee-free at stores and shops, just as you would an ordinary debit card, Bank of America said. If you need cash, you can avoid the out-of-network ATM fee by using Bank of America ATMs. The bank's fee disclosure indicates transactions at BofA ATMs do not incur fees.

Find the nearest Bank of America ATM using this online locator.

To learn whether Bank of America has an unemployment debit card in your name, visit this website.

If you're outside of California, check with your local state employment department. Here are links to some of the other states with unemployment benefits cards that are serviced by Bank of America:

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