WASHINGTON — The IRS has to explain, yet again, a snafu in issuing stimulus payments.
To help speed up the delivery of up to $1,200 in economic impact payments to individuals made available under the $2 trillion Coronavirus Aid, Relief, and Economic Security (Cares) Act, the Treasury Department last week began mailing prepaid debit cards to 4 million Americans.
The prepaid debit cards allow recipients to make purchases online and at any retail location where Visa is accepted. Recipients can also get cash from in-network ATMs, and transfer funds to their personal bank accounts without a fee. (Fees may apply if out-of-network ATM is used).
The cards, issued by Treasury’s financial agent, MetaBank, were intended to speed up the process of getting out the payments. Tens of millions of others have received their money by direct deposit, check or the Direct Express prepaid debit cards used to deliver Social Security payments and other federal benefits.
Here’s the problem. Like so many other glitches that have plagued the distribution of the stimulus payments, communication has been confusing and conflicting. The debit card is arriving in a plain envelope that doesn’t indicate it’s coming from the federal government.
Included in the letter is information indicating that the debit card is being sent on behalf of the Treasury Department in place of a paper check.
But some taxpayers still thought it was a scam or junk mail, which may have prompted the IRS to issue a release on Wednesday explaining the prepaid debit cards.
“There is a website and 800 number, but I don’t want to activate anything,” one reader wrote. “If this is the stimulus money, they get a D- for marketing.”
Eric Green and his wife who live in Arlington, Virginia, received a card in the mail last week. But they like so many others thought it was a con because they had expected that their stimulus payment would be direct deposited into the same bank account where they received their recent federal refund.
“If you received direct deposit of your refund based on your 2019 tax return (or 2018 tax return if you haven’t filed your 2019 tax return), the IRS has sent your payment to the bank account provided on the most recent tax return,” the agency said on its Economic Impact Payment Information Center page set up to answer questions about the stimulus money.
Green said the couple was reluctant to activate the debit card because of the previous guidance from the IRS — and that the two financial institutions where they bank were also unfamiliar with it. “They didn’t seem to know about it either,” he said. “We’ve since debated whether to follow what it says in the letter to activate the card.”
“The letter we received said it came from the Money Network Cardholder Services in Omaha Nebraska,” Green said. “Is it a scam or legitimate? There were a number of steps involved in converting the card into money to be put in our bank. We wonder why we just didn’t receive a government check in the mail like other people have received?”
In response to a question about the confusion, a Treasury spokeswoman referred to a “Frequently Asked Questions” or FAQ page at eipcard.com, a website set with information on how to activate and use the card.
“Prepaid debit cards are secure, easy to use, and allow us to deliver Americans their money quickly,” Secretary Steven Mnuchin said in a statement last week about the new delivery method. “Recipients can immediately activate and use the cards safely.”
The Greens fell victim to a computer scam and they didn’t want to take a chance of being conned again. The couple reached out to The Washington Post to verify the card was legitimate. After being reassured it was, they activated the card and found out they are getting the maximum allowed for a couple, which is $2,400.
Some people have reported they nearly threw the letter and card away — which could be a costly mistake. If you want to get a replacement card quickly it costs $17 for priority mail.