As explained in this article by Matthai Kuruvila,
Oakland residents who use the debit function of the city's
long-awaited municipal identification card will be charged much more in
fees than they would pay if they chose a comparable prepaid card from a
store, according to Consumers Union, the advocacy arm of Consumer Reports. The
organization, which has examined a variety of prepaid cards for several
years, says that Oakland's dual-purpose identification and debit card
imposes an unusual combination of fees and takes advantage of the poor
and disenfranchised population it was intended to help. For
example, if the cardholders enroll the card for federal benefits, they
are charged $2. Oakland's card also charges $1 every time money from
federal benefits is put on the card via direct deposit. … Oakland's card is unique because it was created by the city to
primarily serve as a municipal identification card, largely for
undocumented immigrants. City officials decided to add a prepaid debit
function in an effort to expand the pool of potential users and give
access to banking services to any poor Oaklanders. Oakland
officials and the private contractor running the city's program say the
card's fees are lower than the median fees charged by the most popular
prepaid cards. But [Consumers Union lawyer Michelle] Jun said she is concerned that Oakland's
municipal ID is being promoted by a government entity, which people
might trust more, and the debit function is built in. "It's
targeting a very captive audience in the way it's set up," she said.
"People who are going to Oakland to obtain a city ID will likely see it
has this other aspect to it. It's on-the-spot marketing right there. "They might not be aware there are similar products with better fees out there in the marketplace." [
Kuruvila's article goes on to list a bunch of other fees linked to use of the card.
Is this the beginning of a trend in government services? Last week, Theresa Amato guest posted here about the Chicago Transit Authority's plans to launch a multi-purpose card with a host of fees that many consumers are likely to incur without knowing about them in advance. For more information, go here.
