Plastic Paychecks
Elayne Robertson Demby wrote an article titled “Plastic Paychecks” for HR Magazine in 2003. In this article she describes a new trend that is growing where payroll is being distributed through ACH direct deposits rather than paper checks. The author next mentions that people who do not have a bank account have an option of having their payroll distributed to a debit card. Several businesses that already have such a system in place are mentioned.
I do not believe having payroll linked to a debit card is a good idea. The problem is an issue of security. If a card is lost, there is a good chance the cardholder has in effect lost a great deal of money on the card. Many points of sale do not require pin codes to be inputted for card authorization. While debit limits exist, criminals could ‘test’ the card’s value through making purchases on the internet. MSNBC ran a report on debit card security this spring. It can be viewed here: http://www.msnbc.msn.com/id/11731365/ . This article is one piece of evidence that debit card fraud is prevalent. Calling in that a card is stolen is obviously important, but typically the user does not realize the card is missing until some time has passed. Getting money back from account tampering is not as easy as it sounds and is not always granted. Banks do get suspicious activity reports, but this information gets sent out after the card has been meddled with. I believe payroll should remain outside of debit accounts as the risk being taken is too great. Only when consumer security standards for debit cards are equal to those in place for credit cards will I be ok with plastic paychecks.
Comments
Posted by:
Posted on: October 13, 2006 02:45 PM
Most bank accounts are linked to a debit cards anyways, so this could occur to anyone.
Posted by:
Posted on: October 13, 2006 02:45 PM
Most bank accounts are linked to a debit cards anyways, so this could occur to anyone.
Posted by: Vejas Belzinskas
Posted on: October 13, 2006 05:24 PM
Yes debit cards are most often tied to bank accounts, but typically only portions of a paycheck would find their way into a checking account and not the whole lump sum. My point is that most people have more than one bank account and with this debit card program that would not be the case.