PHOENIX (AP) – Thousands of people have had their prepaid debit cards frozen when they try to direct their tax refund to their accounts, a result of financial industry efforts to combat an escalation in tax fraud.
It’s keeping people from their money, and delaying access to much-anticipated tax refunds. People who rely on prepaid debit card accounts are often poorer Americans who don’t have traditional bank accounts.
Shannon King had her money frozen for two weeks. She had planned to use it for car repairs and to help pay for a move, both of which then had to be delayed. “It was very frustrating,” King said.
King has a Wal-Mart MoneyCard, which is run by Green Dot. She said after her refund was deposited, Green Dot froze the card and asked her to send a picture of her Tennessee state identification card to verify the account. The process to release the money took more than two weeks, she had to submit photos of her ID a number of times – Green Dot said they weren’t readable – and she says she spent hours on the phone with customer service agents to resolve the problem.
The Associated Press reviewed documents sent to Green Dot by King, including her ID picture, and they appeared clear.