The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), passed by the Congress on March 27, 2020, authorizes the Treasury Department to issue “Economic Impact Payments” to individuals with income below $75,000 in the amounts of $1,200 for an adult and $500 for a child. The purpose of the checks is to help people pay for food, utilities, rent, medicine, and other basic necessities at a time when they have been told to stay home and, as a result, have lost income.
About 120 million Americans have received stimulus funds. But for reasons that are not clear, four million of those people did not receive checks, but instead received a prepaid card (called the EIP card) from the federal government. The cards were sent out in a plain envelope that didn’t say that it was from the federal government, so quite a few people didn’t realize that this was their stimulus funds.
Some recipients even called the Better Business Bureau, their state Attorney General - even the FBI - thinking it was a scam!
The cards are managed by Money Network Financial, LLC (I wonder if Steve Mnuchin has friends there, or if they do business with Trump corporations?) and issued by Treasury’s financial agent, Meta Bank, N.A. (same questions). The cards also come with fees if one uses them at an ATM outside of Money Network’s network.
And, in a real affront to consumer rights, the cards also come with a forced arbitration clause; look at section 16 of this. (There is an out for people who receive this card, if they act fast to protect themselves; more on that in a moment.)
Why does that matter?
Well, suppose Money Network charges some fees that aren’t allowed by law to some group of people within those four million who received the cards. (This happens all the time with banks in America; consumers are regularly hit with unauthorized fees and fines of various types.) Under the arbitration clause, the people being cheated can’t go to court. They can’t have a jury of their peers, and they can’t bring a class action. They have to go to a corporate-friendly private arbitration company, where private arbitrators are likely to favor Money Network over the consumers.
Because arbitration is more secretive than court, if Treasury or its private bank contractor Money Network breaks the law, operates illegally, or overcharges people, it’s much less likely that the public will ever learn about it. Also, arbitration tends to restrict the discovery individuals can take, so it’s harder to learn about such things as who ordered or directed illegal actions.
Suppose, for example, that Money Network cheats 10,000 recipients of stimulus cards by charging them some fee that’s not allowed by the contract, or by law. Because of the class action ban in the forced arbitration clause, all 10,000 of those people would have to separately have noticed the extra fee, they would need to read through the entire fine print contract to figure out if the extra fee was illegal (and how many people do you think read these types of fine print documents?). Then, they would have to separately all figure out how to file a claim in arbitration (and since no lawyer can afford to handle cases for individuals over such small sums of money, they would have to do it alone). Then, they would have to separately fight out the case against the bank. In reality, if two or three of the cheated recipients could successfully pursue their case, that would be a miracle, even if Money Network charged a blatantly illegal fee. In contrast, a class action could get refunds for all 10,000 people. The data establishes that while class actions have often recovered millions of dollars for cheated consumers, only an infinitesimal number of consumers actually go to arbitration.
There is one good thing here. For those people who received the stimulus cards who read through all the fine print, (or who read this blog post), they can OPT OUT of the forced arbitration clause. It says this: “If you do not want this Arbitration Clause to apply, you must send us a signed notice within 60 calendar days after you receive the Card. You must send the notice in writing (and not electronically) to our Notice Address. Provide your name, address and Card account number. State that you “opt out” of the Arbitration Clause.”
Please do this! Opt Out and keep your rights! Here’s how to do it:
Write on an envelope:
Money Network Financial, LLC
5565 Glenridge Connector NE
Mail Stop GH-52
Atlanta, GA 30342
Then, take a piece of paper, and write on it:
My name is [your name]. I hereby opt out of the arbitration clause In the Cardholder Agreement of the EIP card for The Coronavirus Aid, Relief and Economic Security Act. My address is [your address]. My Card account number is: [number on your card].
Sincerely,
[Your signature]
That’s it! Don’t let Steve Mnuchin and Donald Trump take away your right to a day in court if they, or their banker friends, break the law and cheat you.
