Thieves Drain California Welfare Debit Cards

Posted January 28, 2011 in Frauds & Scams by Arthur Buono

California and Federal agents are investigating the theft of over $150,000 in welfare benefits from recipients’ debit cards. About 300 accounts were affected. While the victims have had their accounts re-credited, this does not bode well for the government-benefit debit card trend.

  • Welfare recipients’ debit cards accessed at numerous locations
  • More government payments being offered on plastic
  • IRS starting pilot program of debit card tax refunds
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Debit Cards Offer Access to Funds; Are They Secure?

Using debit cards to issue government benefits or other payments is getting a lot of attention. They’re considered a safe, cheap and easy way to get funds to recipients. Many if not most of the recipients don’t have bank accounts the funds can be deposited in.

The cards are also considered cheaper for recipients than check-cashing services. Some people have complained though the banks that process the cards have been taking too much in fees.

The IRS will offer tax refunds on debit cards this year in a limited program. With more government funds being issued on debit cards, the security of these systems becomes critical. While the victims of the immediate fraud have been made whole, regular bank-issued debit cards do not provide the same theft protections as credit cards do.

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