California Middle Class Tax Refund Debit Cards Shipped Without Chips – Update Cali

Many Californians continue to wait for their middle-class tax refund, a refund owed to them because of California’s budget surplus. The refunds, also called inflation payments, began as a gas price relief mechanism to be paid out by the DMV. Then the governor and legislature reached a compromise, and the payments were to be sent through the state franchise tax office. Some California residents would receive money by direct deposit under the FTB system. (Click here for an overview of who is eligible for which payment.) However, anywhere from 10 to 13 million payments would be sent by debit card. The FTB contracted it out and eventually signed Money Network, a New York bank, to process the payments. As of November 11, more than 2.5 million debit cards have been issued. | RELATED | Got a California Middle Class Tax Refund Debit Card? Here’s how to use it, avoid fees Concerns about using a debit card, however, go back even before the state decided to return money to residents. In its documentary “Easy Money: Fraud, Fortune and Failures,” KCRA 3 Investigates detailed how organized crime rings used skimmers to steal magnetic stripe data from unemployment debit cards. Then in March, KCRA 3 also detailed how similar organized crime rings are targeting Cal Works and Cal Fresh cards — debit cards used for those receiving welfare. One thing they have in common is that there is no anti-fraud chip technology. on them, making it easy for a skimming device – with a camera installed – to obtain both the electronic data and the PIN. Then the ring drains all its money from the account. At one point, the CalWorks system was losing as much as $3 million a month. These cards were still not equipped with a chip. Then came the middle class tax refund. The KCRA 3 Investigators obtained a copy of the contract between the Franchise Tax Board and Money Network. The FTB redacted parts of that contract, but it specifically states, “The State will require the use of an EMV (Europay, MasterCard, and Visa) chip card to offer the maximum protection possible.” That’s on the first page of the contract. agreement.| RELATED | Read the revised agreement here In an addendum explaining the bank’s requirements, the agreement also says Money Network will “provide platinum (maximum) level fraud protection and support for clients and customers.” Debit card images on FTB’s website and a special page explaining how cards activate, mctrpayment.com, shows pictures of debit cards with chips. Still, several viewers emailed KCRA photos of their MCTR debit cards that don’t have the fraud prevention chip. Asked why the debit cards supplied to California residents do not have this basic fraud prevention mechanism, an FTB spokesman said: We are aware of fraud concerns across the country related to programs of this nature. Working with the Money Network, we are taking every step to ensure that California and its citizens are protected.” The FTB representative went on to say that “in light of the need to ship debit cards as quickly as possible while addressing fraud control and supply chain issues, the FTB has optimized the use of chip cards and non-chip cards. This hybrid approach allowed the cards to be distributed months earlier than using only chip debit cards.” The announcement of the tax refunds paid to the FTB came in June. The payment began going out in late October. The FTB also states that the section regarding the use of chip and non-chip debit cards in the contract is redacted “for proprietary information establishing security measures.” “Money Network is complying with the terms of the agreement as agreed,” the FTB said. have a chip so that it is ignored at a later stage if it really is. editorial shows. The FTB says that “Money Network’s fraud controls are in place when a debit card is issued, sent, activated and used, providing platinum-level fraud protection .” However, past history at other departments, such as EDD and CalWorks, has shown that cards without chip technology for fraud prevention are easy to collect and clone. We have asked the FTB and Money Network for answers on how they will respond to the possibility of card misuse and fraud, but they have not responded to our follow-up questions at the time of writing.| MORE | California Inflation Relief: Is Your Private Information Being Sold to Marketing Companies?

Many Californians continue to wait for their middle-class tax refund, a refund owed to them because of California’s budget surplus.

The refunds, also called inflation payments, began as a gas price relief mechanism to be paid out by the DMV. Then the Governor and Legislature reached a compromise, and the payments were to be sent out by the State Franchise Tax Board.

Some Californians would receive money by direct deposit under the FTB system. (Click here for an overview of who is eligible for which payment.)

However, anywhere from 10 to 13 million payments would be sent using a debit card. The FTB contracted it out and eventually signed Money Network, a New York bank, to process the payments.

As of November 11, more than 2.5 million debit cards have been issued.

| RELATED | Got a California Middle Class Tax Refund Debit Card? Here’s how to use it to avoid fees

However, concerns over the use of the debit card persist even before the state decides to refund residents.

In its documentary “Easy Money: Fraud, Fortune and Failures,” KCRA 3 Investigates detailed how organized crime rings used skimmers to steal magnetic stripe data from unemployment debit cards.

Then in March, KCRA 3 also detailed how similar organized crime rings are targeting Cal Works and Cal Fresh cards — debit cards used for those receiving welfare.

One thing they have in common is that there is no anti-fraud chip technology on them, making it easy for a skimming device – with a camera installed – to get both the electronic data and the PIN. After that, the ring drains all of its money from the account.

At one point, the CalWorks system was losing as much as $3 million a month. These cards are still not equipped with a chip.

Then came the middle class tax refund.

KCRA 3 Investigates obtained a copy of the contract between the Franchise Tax Board and Money Network. The FTB redacted parts of that contract, but it specifically states, “The State will require the use of an EMV (Europay, MasterCard, and Visa) chip card to offer the maximum protection possible.” That’s on the first page of the contract. agreement.

1 side of the contract

| RELATED | Read the amended agreement here

In an addendum explaining the bank’s requirements, the contract also says Money Network will “provide a platinum (maximum) level of fraud protection and client and customer service support.”

Debit card images on the FTB website and on a special page explaining how to activate the cards, mctrpayment.com, show images of debit cards with chips.

Still, several viewers emailed KCRA photos of their MCTR debit cards that don’t have the fraud prevention chip.

Here is the debit card version with the viewer's personal information removed.

Owned by Hearst

Here is the debit card version with the viewer’s personal information removed.

When asked why the debit cards issued to California residents do not have this basic fraud prevention mechanism, an FTB spokesperson said, “We are aware of fraud concerns across the country related to programs of this nature. We are working with the Money Network to take every step to ensure the protection of California and its citizens.”

The FTB representative went on to say that “in view of the need to deliver debit cards as quickly as possible while addressing fraud control and supply chain issues, the FTB has optimized the use of chip cards and non-chip cards. This hybrid approach has allowed the cards to be distributed months earlier than using debit cards only with chips.”

The announcement of the refund of taxes paid to the FTB came in June. The payment started going out at the end of October.

The FTB also says that the section regarding the use of chip and non-chip debit cards in the contract is redacted “for proprietary information establishing security measures.”

“Money Network is operating within the terms of the contract as agreed,” the FTB said.

Editorial fraud

We asked the FTB to clarify why this section regarding the use of non-chip cards was redacted and why the contract specifically states that it must have a chip to be ignored in a later section, if that is indeed the case. editorial programs.

The FTB says “Money Network’s fraud controls are in place when issuing, sending, activating and using a debit card, providing platinum-level fraud protection.”

However, past history at other departments, such as EDD and CalWorks, has shown that cards without chip technology for fraud prevention can be easily skimmed and cloned.

We asked the FTB and Money Network for answers on how they would respond to the possibility of card misuse and fraud, but they had not responded to our follow-up questions at the time of writing.

| MORE | California Inflation Relief: Is Your Private Information Being Sold to Marketing Companies?

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