How Bank of America cashes in on your tax return

Last week, the Charleston Post & Courier’s David Slade wrote a column about South Carolina’s new practice of issuing tax returns in the form of prepaid debit cards from Bank of America. The state Department of Revenue announced the program back in December, but conveniently left off the long list of fees which customers without BofA accounts will be subject to.

For every withdrawal from a non-Bank of America ATM, BofA will take $2.50 off the top — in addition to any fees the ATM owner might charge. Want to get your money directly from the bank? The first time’s free, but every withdrawal after that comes with a $10 fee. Leaving the country? Bank of America takes 2% of every single transaction you make outside the United States. Had enough and want to close your account? No problem — after a $5.00 closure fee, of course.

As Slade puts it, why should you have to pay to access your own money? “They’re not even nickel and diming people, they’re five-dollaring and 10-dollaring people,” commented consumer advocate Sue Berkowitz, Director of the Appleseed Legal Justice Center.

Bank of America didn’t have to bid for the program, according to a Department of Revenue spokesperson who told Palmetto Public Record the state chose BofA over South Carolina-based banks because “they were the best fit.”

But the program isn’t being paid for with your tax dollars, because Bank of America doesn’t charge the state for the service. This should be a red flag in and of itself because no company does anything for free, especially such an ethically-challenged business as Bank of America. Instead, BofA makes their money off of the unnecessary fees they charge consumers — not to mention all the interest they collect while your money sits in their account.

Of course, Bank of America’s debit card program isn’t mandatory, but it is opt-out instead of opt-in. So unless you set up direct deposit for your return or check a box saying you want a paper check, get ready to pay up.