Social Security recipients – particularly those who depend entirely on it – don’t need everyone skimming off the top. That’s why there is a plan on the table to eliminate paper Social Security checks entirely. The Treasury has plans to phase the checks out by 2013 and send funds via direct deposit and prepaid debit cards, writes The Wall Street Journal. Doing this will ideally make benefit distribution more secure and conserve the taxpayers’ money. But according to numerous consumer groups, this will open the door for big banks like Wells Fargo and U.S. Bancorp to aggressively market alternative cash advance-style loans to their Social Security customers.
Fixed income guests are the target of bank marketing
The National Consumer Law Center indicates the new breed of bank-issued cash loan products draw straight from consumer Social Security benefits as the necessary collateral. Such personnel loans original via customer phone call or online request. When the next benefits check comes via direct deposit, the bank takes its cut for the cash until payday service. Where it gets really scary is when a payday loans no fax from the bank isn’t really paid in 35 days: the bank takes out every little thing owed, whether it causes overdraft and an explosion of fees or not.
Making up for lost revenue by siphoning from baby boomers
Considering the upcoming law status of the Wall Street reform bill, banks are scrambling to generate revenue wherever possible. The National Consumer Law Center finds no surprise within the fact that banks are pushing hardest on their payday loan products now, considering the financial reform restrictions to come. Banks have squeezed their Social Security customers to the tune of $ 700 million in benefits each year for overdraft fees.
Want to avoid banks hitting up your Social Security before you do?
The Wall Street Journal suggests that consumers consider the prepaid debit card disbursement option. They’re low cost and FDIC insured. The card could be used like a standard ATM card for purchases and bill payments.
Additional info at these websites
online.wsj.com/article/SB10001424052748704875004575375474092141764.html
en.wikipedia.org/wiki/Social_Security_%28United_States%29
