Bank of America has retreated from plans to charge a monthly debit card fee, but some of the people who can least afford it are still being stung. In South Carolina, one of several states that have contracted with BofA to deliver unemployment benefits through debit cards instead of checks, out-of-work people are charged when they use their pre-paid cards at other banks' ATMs—even if the nearest BofA machine is many miles away, the Huffington Post finds. One woman estimates that she has paid some $350 in fees. "It really boggles my mind," she said. "This bank is taking little bits of money out of thousands of pockets, including mine."
South Carolina is just one of 41 states where big banks have won contracts to deliver public benefits, typically through contracts that allow them to charge unlimited fees. The state managed to have some fees axed after learning that unemployed cardholders in other states didn't face the same charges, but some fees remain, including the out-of-network charge and a charge for requesting more funds from an ATM than remain on the card. "It's not what we would like to see," an attorney at the National Consumer Law Center says. "It is not as if the bank can legitimately argue it costs them something not to let someone take money out of an ATM."