Home Depot, others probed over use of pre-paid cards as paychecks

10:43 AM, Jul 3, 2013   |    comments
(Photo courtesy Atlanta Business Chronicle)
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(ATLANTA BUSINESS CHRONICLE) -- Atlanta-based The Home Depot (NYSE: HD) and Wal-Mart Stores Inc. (NYSE: WMT) are among companies being investigated by the New York attorney general over fees charged employees on prepaid cards used as paychecks, reports Bloomberg News.

Those companies and others, which include Time Warner Cable Inc. (NYSE: TWC) and Darden Restaurants Inc. (NYSE: DRI), were asked for information about their use of the cards, including disclosures to employees and any fees workers pay, according to letters obtained by Bloomberg News.

Bloomberg notes that more companies are using prepaid payroll cards, according to a February 2013 report by research and advisory firm Aite Group. The firm said $34 billion in gross dollar volume was loaded onto 4.6 million active payroll cards in 2012.

Aite Group said the cards are a "sales opportunity" for bank issuers, adding the cards can potentially generate revenue and new bank customers.

A New York law requires that employees give advance written consent before being paid with a payroll card.

The attorney general's office wants a summary of fees paid by employees or deducted from accounts as a result of payroll cards.

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