VISA HR Block Tax Refunds

Okay all you guru's....I am going to show my ignorance here, so please forgive me.

We have an HR Block across the street that is doing the income tax returns and giving the person a VISA debit card with no name on it and telling the customer to bring it over to our bank and we have to give them a cash advance. 99% are not our customers.

Question 1 - Do we have to take the cards and give a cash advance? I remember discussion last year that said something to the effect of "VISA operating rules say you have to give a cash advance"

Question 2 - Can you limit how much you do on a cash advance? Again, I vaguely remember some discussion last year about their being no limit according to VISA operating rules. What about all the cash that we now must give out to non-customers and don't have it for our customers?

Questions 3 - How can VISA dictate that you must assume all the risk for a non-customer? What if is is a joint card? How do we know? What if the joint owner comes in later and says they should have gotten half?

Question 4 - What are you all doing?

Thanks for your input?

I can forward you the Refund check/card guidelines we have used for a couple of seasons

Just scrolling through and saw this entry. I would love to know move about this as well, the cards will be fairly new thing to me.

Just scrolling through and saw this entry. I would love to know move about this as well, the cards will be fairly new thing to me.

First of all, if they are bringing Visa cards, you'd better check it out. The card is a MasterCard (which I just verified on the website). http://www.hrblock.com/bank/emerald_prepaid_mastercard/index.html


They should be coming to you with a valid ID that you should ask to see.

When you run the card and get an approval, you know you can process the transaction.

Don't forget MC gets a fee at the time of transaction.

Last year we got a letter explaining their program. If you did not, call their customer service number.

This is a HORRIBLE idea.

First, how difficult will it be for the criminals of the world to counterfeit this card....with NO CARDHOLDER NAME ON IT!!!!

Second, now criminals will be able to get their tax refunds and spend them without having to negotiate a check, which has become increasingly difficult for them, having no bank (because they've burned them all and owe each one for fraudulent activity).

IRS tax levies will become obselete.

Has H&R Block become the Western Union of the tax filing world?

Our bank has decided that the risk of someone stealing a card without a name imprinted and there being no way to verify if the card actually belongs to the individual in possession of it that we will not process cash advances on these cards. We have inquired of individuals possessing these cards and they have told us that they were issued a pin number with the card, it has been our practice to direct them to our ATM where they can use the pin to get cash from this card.

We have received no information concerning these cards from any source.

Kendrar,

I like that idea. It seems MUCH safer.

Kendrar,

Keep us posted on how your bank's actions on this matter are received by the public. Also, thaks for the heads up that they are issued a PIN with the card. I like your idea, too much fraud potential in those cards.

If you have a merchant agreement with the card issuer for the processing of the transactions, i.e. VISA or Mastercard, such a practice most likely violates your merchant agreement with them.

THis could be interesting as our bank's cash advance procedures state that the name on the card must match the name of the individual in front of you - if they are handing these cards out at the time the refund is done, I can't imagine that they are pre-printed. I don't think we would be honoring these cards for cash advances.

Thanks for all your thoughts. I have some additional information. I was provided information from HR Block that states that if you accept Mastercard you violate their agreement if you refuse to issue cash advance. The limit is a $5,000 cash advance, but if it is undue hardship you can limit it to $1,000. Of course the information I received is from HR Block so I don't know if it is truly reliable. I tried to read our agreement and also read the agreement online, but found it confusing and not easily understood.

I did find out some information from a bank customer with one.

1. HR Block charges the customer $20 for a tax return loan check, $10 for a Mastercard.

2. Mastercard charges a $20 fee for doing the cash advance, so the customer has to leave $20 balance on the card. (By the way...by the propaganda I received from HR Block states we will violate our agreement with Mastercard if we charge a fee for the cash advance. Bank customer or not.)

3. They are provided a PIN with the card. The client can use an ATM, but they are supposedly charged a fee for each transaction at an ATM. The customer I talked with told me she would be charge $2.50 from Mastercard each time she used it. I don't know if that is the case, but it is what she told me.

Our bank has some real concerns about the fraud potential associated with a card that does not have a name on it. We have also received a couple that were not signed. The client "forgot" to sign it before leaving HR Block.

Another question that we have, but I cannot find the answer to is....Do they issue one card to on a joint return. What happens if wife gets card, takes all the money in a cash advance; then husband brings card in for cash advance and there is none to take. Couldn't that cause an issue in the lobby with an upset customer. At least with a check it has both listed and they both have to sign.

As I learn more, I'll try to keep you informed. If anyone finds out anything else, please keep us all informed.

It comes down to the fact is that if you want to process Mastercard transactions, you have to follow your Mastercard agreement. The information that you received from H&RB matches what I know of a typical agreement that a bank signs. The agreement they have with you, as with all merchants that sign the agreements, do not let you pick and choose your transactions, otherwise their cards are not worth the plastic they are printed on. The agreement and operating rules will also protect you regarding the processing of transactions on cards with no names if you follow their operating procedures.

ShannonC,

As to your concerns about cards issued in connection with a joint return -- Consider the parallel of a true joint return refund (the cards are actually loaded with the proceeds of a refund advance loan, but that doesn't affect the question at hand) that is direct deposited to a joint account. Everyone's comfortable with that concept because the IRS and state tax agencies have been doing it for years, right?

So husband cleans out the joint account the day the tax refund arrives, and wife comes to the bank only to find that the refund is gone. Except for the fact that I deliberately swapped the "winner" and "loser" in my illustration of a race for the funds, what's the difference from your scenario?

My concern would be who would take the loss if the card is reported lost or stolen by the individual whose refund was loaded onto it? Does H&R Block take the loss or does the bank take the loss?

Good question. We have that same question.

FYI-
Our local police called late today to report that a purse was stolen with a card in it. They wanted to alert the local banks that the card was in the girls purse and she had not signed the card. I don't know if HR Block will block it or what will happen. I assume they will be able to do something. I hope the local PD will call and let me know the process. If they do, I'll let you know.

What a mess.

This is just too much risk for a bank to take...

The ascinine things that banks must do in order to issue debit cards (or process cards via Visa or MC) is too much risk to take. The mere fact that these cards are issued with no name on the front, in my opinion, invalidates them and should nullify any mandate that says we HAVE to accept them just as the mere fact that engraving your PIN onto your ATM card gives you no more liability as a customer.

The bank I work for is openning it's doors in two weeks and we haven't gotten to purchasing a cash advace machine (other than we're going with NOVA). Maybe I'll just put it off until April or May...

"The ascinine things that banks must do in order to issue debit cards (or process cards via Visa or MC) is too much risk to take."

While everyone is busy ranting about this, has anyone actually researched the operating rules concerning these type of cards issued through Mastercard to determine what exactly are the risks and liabilities? I have seen no one present anything that could be considered an actual "fact" concerning bank liability under any specific circumstance.

It is my understanding that the bank does have some protection against loss if the procedures are followed to the letter. I don't know all the rules, but they were pretty basic as I recall: card plastic must be present and must be signed, customer must have valid ID, imprint of card must be made and customer must sign, etc. Any deviation from the procedures result in loss of protection for the bank.

Do they sign them in front of the issuer or are the cards mailed to them? If they are not signed in front of the issuer, ANYONE could sign it. I could have my friend sign it, let him use it, then dispute the transactions based on the signature. I doubt anyone makes a copy of the back of the card (I may be wrong) to prove that the signature was verified.

Stored value cards (that is what this is) are fast becoming a MAJOR tool in committing fraud.

If it makes anyone feel better, the IRS is getting itchy about the whole tax loan concept, in general:
http://www.msnbc.msn.com/id/22502057/

If you look on the H & R website under the Q & A for the card - the question - I want to get cash with my card. How can I do that? It talks about POS and ATM. It then says - With a personalized H & R Block Emerald Card and a fee of $20, you can go to any bank and request a withdrawal of funds from your card.

After many phone calls to visa all they could do was refer me to the Visa reg book section 10.3.D for embossing and to follow the guidelines for cash advances. It seems that there are no specific guidelines for "debit cards" for tax refund loans.

With what little help I could get from Visa I believe that we do not have to do cash advances on these cards because if they are not embossed with a name (following Visa guidelines) how do you properly ID the card holder to do the cash advance?

If I am completely backwards on this issue please let me know as I really do not see that I would violate regs if we do not do the cash advances on these cards.

Their website no longer has this distinction. It merely states:
"For a fee of 1.5% of the funds requested, you can go to any bank and request a withdrawal of funds from your H&R Block Emerald Card. "

The fee is imposed on the card account by the issuer. It is not a fee that the bank making the cash advance collects. Visa and MasterCard rules don't permit the imposition of a fee by the institution making the cash advance.

Sorry, I just want to be clear that I understand. Because we have a contract with MasterCard we are obligated to accept these cards for a cash advance. Names are not embossed on the card so we will need to rely on the signature on the back. Are there any other safeguards we can take to make sure the person holding the card is the actual holder? Or is it more like a gift card and if it's lost it the owners and H&R Blocks loss... thanks

After speaking with our local H&R Block, the only way you can verify the card and the owner match is with the paperwork from their tax returns. They stated that the card number and name are together with the information they recieve. We will be requiring that piece of information in order to do the cash advance.