Your coronavirus stimulus card comes with privacy concerns

At a time when all eyes are on the next stimulus checks, there are still a few questions surrounding the first checks. Actually, the questions are not related to the checks, but the prepaid debit cards. There has already been a lot of confusion related to the card, including the fees. Now, privacy concerns are being raised with the coronavirus stimulus prepaid debit cards as well.

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q2 2020 hedge fund letters, conferences and more

Privacy issues with coronavirus stimulus EIP card

About 4 million Americans received the stimulus checks in the form of prepaid debit cards. The EIP (Economic Impact Payment) card has already created a lot of confusion, including the usage fees, people thinking it was junk mail and more.

Seth Klarman: Investors Can No Longer Rely On Mean Reversion

Volatility"For most of the last century," Seth Klarman noted in his second-quarter letter to Baupost's investors, "a reasonable approach to assessing a company's future prospects was to expect mean reversion." He went on to explain that fluctuations in business performance were largely cyclical, and investors could profit from this buying low and selling high. Also Read More

Recently, a group of lawmakers also raised concerns over the need of sharing personal data for activating the card. Senator Maggie Hassan of New Hampshire and 14 additional senators, in a letter to Treasury Secretary Steven Mnuchin and IRS chief Charles Rettig, raised their concerns about sharing personal data, which they say could be shared with third-party marketers.

The letter notes that those who want to transfer the money from their card to their bank account, need to complete a “complicated registration process” as well as provide “substantial personal information.” Also, users have to share "significant personally identifiable information" to activate the card, the letter says.

The letter specifically raises privacy concerns over the cardholder agreement to get the coronavirus stimulus via prepaid card. As per the letter, the agreement "allows our constituents' personal information to be shared with third parties for marketing and other commercial purposes."

These EIP cards are issued by MetaBank and are managed by Money Network Financial. The letter notes that the cardholder agreement allows Money Network Financial to disclose the users’ Card account or the transactions they do with the card to "affiliates" and to "service providers."

“This ambiguous language raises serious questions about whether Money Network Financial is permitted to sell personal information of individuals who activated stimulus payment debit cards," the letter says.

Concerns over fees charged

The letter requests the Treasury and IRS to clarify whether or not the user data will be disclosed, and if so, then how it could be used. Also, the letter wants an answer on how Treasury would protect the personally identifiable information of the cardholders.

The letter also expressed concern over the withdrawal fees when using an out-of-network ATM and a $5 fee for getting cash at a bank counter. Further, the letter raised the issue with the delivery of the replacement card as well.

Though the IRS announced that it would waive the $7.50 replacement fee for lost cards, the replacement card takes about 7 to 10 business days to arrive. To get the card faster, the user needs to pay a $17 fee, and this is what the senators are "seriously concerned" about.

In an email to CBS MoneyWatch last month, Hassan said she wants the Treasury to address the issues and "ensure that Americans can get full access to the stimulus payments that they desperately need."