Social Security recipients, beware banks pushing personal loan

Individuals on Social Security generally aren’t amenable to giving away their benefits. In part, this is why paper Social Security checks are on the way out. The Wall Street Journal indicates that 2013 is the year in which the Treasury Department will stop paper checks and move entirely to direct deposit and prepaid debit cards. The intention is to save taxpayer dollars and make benefits more secure. Sadly, big banks like Wells Fargo couldn’t leave well enough alone; consumer groups fear they will market their own high-cost cash advance loans to Social Security customers at an even more frenetic pace. Source of article – Social Security recipients, beware banks pushing personel loans by Personal Money Store.

Fixed income guests are the target of bank marketing

Collateral for the cash til payday loans comes straight from the recurring deposits of Social Security benefits, says the National Consumer Law Center. Bank personal cash loan of this nature are created when customers file a request via phone or online. When the customer’s following Social Security benefits payment hits their account via direct deposit, the bank gets its money before the consumer can spend it. Where it gets really scary is when a pay day loans from the bank is not paid in 35 days: the bank takes out anything owed, whether it causes overdraft and an explosion of fees or not.

Making up for lost revenue by siphoning from baby boomers

Considering the upcoming law status of the Wall Street reform bill, banks are scrambling to generate revenue wherever possible. It seems like no small coincidence to the National Consumer Law Center that this aggressive push to get Social Security customers into payday loan-like products coincides with the coming of the financial reform law. Sources indicate that as much as $ 700 million in Social Security benefits are taken each year to pay overdraft fees, which draws focus to the magnitude of the issue for America’s monolith banks.

Want to keep away from banks hitting up your Social Security before you do?

The Wall Street Journal recommends the prepaid debit card option for benefit disbursement. They’re low cost and FDIC insured. The card can be used like a standard ATM card for purchases and bill payments.

Find more details on this topic

online.wsj.com/article/SB10001424052748704875004575375474092141764.html

en.wikipedia.org/wiki/Social_Security_%28United_States%29