BY JILL COWAN, Californian staff writer firstname.lastname@example.org
Every two weeks, more than a million Californians await unemployment insurance benefits they receive through the mail.
But sometime over the next few months, they'll get their last paper checks.
Instead, they'll receive plastic.
That's because starting Friday, the state's Employment Development Department is phasing out paper checks in favor of cost-saving EDD Debit Cards.
Pre-paid government benefit cards are hardly a novel concept. EDD already rolled out its debit card program for about 400,000 recipients of disability insurance earlier this year, and the California Department of Social Services has provided a more restricted Electronic Benefit Transfer Card for some time.
Still, according to Chief Deputy Director of EDD Pam Harris, "this is indeed a major change in the history of the state's unemployment program."
EDD will send out about 10,000 of the Visa debit cards per day until all unemployment insurance benefits have been converted.
As of a survey period in April of this year, 32,044 Kern County residents were certified to receive unemployment benefits, and they'll receive their cards in no particular order throughout the transition period.
Customers should receive a letter around the time they would usually receive a check, telling them to expect their card. Then, a few days later, the actual cards should follow, said Michele Sutton-Riggs, a representative of the unemployment insurance branch of EDD.
"It's important for customers to know they will receive a letter noting they'll be receiving a card," she said.
While Loree Levy, deputy director of the public affairs branch of EDD, said inserts have been sent informing claimants of the impending switch over the past couple of months, some customers may still be unaware of the changes.
As a result, Levy said, EDD is "reaching out" with a YouTube channel and a website with more information on the card.
Sutton-Riggs said the transition could delay payment by a few days, so customers should make sure to adjust any automatic bill payments accordingly.
Once activated, the cards can be used anywhere Visa debit cards are accepted, including ATMs, grocery stores, banks and vendors online. Customers can also opt to have the funds transferred directly into personal checking accounts at banks other than Bank of America, which is partnering with EDD in servicing the debit cards.
Bank of America will provide customers with online access to their card balances, along with fraud protection and customer service.
EDD officials said claimants will receive the same funds, and will still have to verify their unemployment on a bi-weekly basis.
Only now, said Laura Secondo, senior vice president for strategic sales at Bank of America, they won't have to bother with cashing the check -- or the associated fees.
"It's important that the consumer have access to funds quickly without incurring extra fees," she said.
Secondo said claimants will have free unlimited numbers of cash withdrawals at Bank of America ATMs, and will be able to withdraw the balance of their accounts at any bank, free of charge.
She also said Bank of America will not charge for the first two out-of-network ATM withdrawals, though customers will still have to pay any fees for ATM use charged by the machine's owner.
Still, as long as "customers keep track of their balance," and make informed withdrawals, it is possible for claimants to pay no fees to access their benefits, Levy said.
"(The card) can make a difference if they don't want to pay the extra money to cash the check," said Lisa Jones, who has been on unemployment insurance since January.
Sutton-Riggs said the switch will not only benefit customers, who will be able to avoid paying check-cashing fees, it will also initially save the state $4 million per year.
By next spring, she said, EDD hopes to have an enhanced paperless claim form system, which would save more money.
For Jerry Gonzalez, a former diving instructor who has been unemployed for the past four months, the elimination of physical checks is just "safer all the way around."
"There's less possibility for theft of the check," he said. "Where I live is fairly protected, but people have mailboxes exposed."
Plus, he said, for people without checking accounts, after cashing the check, "you're walking around with cash."
And, of course, Gonzalez said, paying with plastic is "much more convenient."