Thursday, October 09, 2014

States (at least Virginia) use prepaid debit cards for income tax refunds; another invitation for fraud?

Despite all the criticism of debit cards, the Virginia Department of Taxation sends state income tax refunds in the format of debit cards from MasterCard (which whom VA seems to have made a deal to make a little money), the “Way2GoCard” which sounds like a MasterCard trademark. 

Given all the security problems that will exist until the banks and credit card companies implement the European chip technology in 2015, sending tax refunds this way seems a bit tacky.

But banks can deposit the money into a checking or savings account, by “withdrawing” the entire amount, and then creating a deposit clip.  This requires a teller; it can’t be done alone at an ATM.  I just did it yesterday,   

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