I have a real problem with Oklahoma’s new policy for income tax refunds.
Beginning in 2012 if you do not provide direct deposit info (those funky looking numbers along the bottom of a check) any refund will be sent to you as a debit card. This bright idea is the product of a new law requiring all transactions from the State to be electronic.
I had never heard of this- and apparently my accountant hadn’t either. When it arrived in the mail we thought it was a scam (albeit a very professional-looking scam) and nearly tossed it in the shredder. Many years ago credit card companies would send people pre-approved cards in the mail hoping they would activate them and become a customer. Of course scammers had a field day as they intercepted the cards from mailboxes all over town. I digress…
In a press release dated January 25, 2012 the Oklahoma Tax Commission (OTC) claims “the Oklahoma Tax Refund Debit Card will make it easy for taxpayers to receive their tax refund.” Seems like they could have let people know about this a bit sooner than the end of January. But it’s easy. So let’s see how easy it is by depositing my 89 year-old father’s refund.
I referred to the OTC website and found their frequently asked questions about this program. I wanted to know if I could deposit the funds into a checking or savings account. They said yes…
For a fee of 75 cents you can go on-line to http://www.goprogram.com to transfer the card balance to your checking or savings account. It saves a trip to your bank or credit union. It’s more convenient than depositing a check and saves gas.
First off why should Dad’s income tax refund require him to pay anything? There’s a word for deals where someone claims you’re getting money, but have to send in a small fee first. The word is scam.
Second, it is not “easy” for my 89 year-old father to go on-line (still using the hyphen? really?) for anything. Let alone to pay someone a fee for getting his own money.
Turns out the card can be cashed in at a bank after it has been activated. But of course that requires a trip to the bank. Oh, and if you let it sit around for two months they start charging you a fee! So if you haven’t sent in your return and you have a refund coming be sure to include your direct deposit info.
My biggest problem with this whole idea is your money is tied up in a private system specified by the government. Even if Dad decided to just go out and buy stuff with his debit card the merchants are getting popped upwards of 2% for each transaction. If this refund had been issued as a check those fees would not have existed. So to my eye the State of Oklahoma is helping out the credit card companies at the expense of Oklahoma taxpayers.
The claim is this will save taxpayers $500,000. But I’m willing to bet it costs us way more than that in penalties, transaction fees, bandwidth and gas. How many other people have opened their mail and trashed it thinking this was scam?
But then again, maybe they were right.
For more information here’s a link to an FAQ from the OTC.