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CARES Act Stimulus Debit Cards Force Americans To Sacrifice Constitutional Rights For Cash



The rollout of prepaid stimulus debit cards to deliver economic impact payments to Americans has gone from bad to worse to terrible. Most recently, an analysis of the cardholder agreement identified that card recipients are being held hostage by the card’s issuer and service provider, Metabank and Money Network Financial, respectively. The companies are foisting an arbitration agreement that forces cardholders to give up their right to a trial by jury in order to access their stimulus funds. They are also potentially selling American’s personally identifiable information to third-parties and service providers, raising important privacy concerns.

Prepaid Stimulus Card Background:

Intended for individuals who didn’t have their bank account information on file with the IRS, the 4 million prepaid debit cards were mailed a few weeks ago and came loaded with economic impact payments, commonly referred to as stimulus payments. The problems started immediately with some people mistaking the cards, which came in plain white envelopes, for junk mail. Then, many individuals encountered another problem: incorrect names printed on the card.

MORE FROM FORBESHere’s What To Do If Your Stimulus Visa Debit Card Arrives With The Wrong Name

Now, additional concerns have come to light about shady terms that MetaBank and Money Network are imposing on consumers.

Forced Arbitration Clauses:

As reported by Paul Bland in Daily Kos, a mandatory arbitration clause is included in Section 16 of the cardholder agreement. This means that if a recipient of a prepaid stimulus card has a dispute, she must agree to arbitrate the dispute through a third-party arbitrator rather than pursue the claim in court. “This is virtually universal for prepaid debit cards, but unusual for something authorized by the U.S. government as a payment, especially when only a fraction of recipients got the EIP Cards as opposed to paper checks,” David Dayen of The American Prospect points out.

According to Section 16 of the cardholder agreement, cardholders are required to give up their rights to:

  1. Have juries decide Disputes.
  2. Have courts, other than small-claims courts, decide Disputes.
  3. Serve as a private attorney general or in a representative capacity.
  4. Join a Dispute you have with a dispute by other consumers.
  5. Bring or be a class member in a class action or class arbitration.

“For the government to say you only get this money if you give up the right to trial by jury, it’s really unusual,” said Bland, who first noticed the arbitration clause. For consumers, there are many downsides to arbitration including being unable to join a class-action lawsuit, being unable to have their case heard by a jury of their peers, being compelled to secrecy, being roped into using corporate-friendly arbitration companies “where private arbitrators are likely to favor [the card’s program manager] Money Network over the consumers”, and being forced to pay high fees even if the claim is a small amount.

“Companies insert arbitration clauses because they work, protecting them from liability and incentivizing them to steal with impunity,” says Dayen. There’s also an important public interest and oversight component as the secret nature of arbitration means that “if Treasury or its private bank contractor Money Network breaks the law, operates illegally, or overcharges people, it’s much less likely that the public will ever learn about it” according to Bland.

Here’s What To Do Immediately If You Received A Prepaid Stimulus Card:

Notably, the cardholder agreement includes a 60-day period to opt-out of arbitration. Given that the cards were only mailed in mid-May, most, if not all Americans who received them are still within the 60 day period. If you received a card, please take two minutes to write a short note and mail it to Money Network to opt-out of the arbitration clause.

Here are the key steps:

  • You must send a signed notice within 60 calendar days after you receive the Card.
  • Provide your name, address and Card account number. State that you “opt out” of the Arbitration Clause.”
  • You must send the notice in writing (and not electronically) to our Notice Address.

Here is the address to use:

Money Network Financial, LLC

5565 Glenridge Connector NE

Mail Stop GH-52

Atlanta, GA 30342

MetaBank and Money Network will undoubtedly argue that because consumers have the technical ability to opt-out, nothing is being forced on them. This would be a misleading argument, given that we have so much insight on the power of defaults as well as research by the Consumer Financial Protection Bureau (CFPB) showing that “consumers are generally unaware of whether their credit card contracts include arbitration clauses” and that “consumers are generally unaware of any arbitration clause opt-out opportunities they may have been offered by their card issuer.”

Sale Of Information To Third Parties And Marketers

Additionally, a group of Senators – Mark R. Warner (D-Virginia), Maggie Hassan (D-New Hampshire), Sherrod Brown (D-Ohio), and Jack Reed (D-Rhode Island) – recently sent a letter to Treasury Secretary, Steve Mnuchin, raising a concern about the sale of card recipient’s personal information.

The Senators point out that the cardholder agreement for the stimulus debit cards allows Metabank and Money Network to share personal information with third parties for marketing and other purposes. Indeed, in Section 8 of the cardholder agreement, individuals must agree that Metabank and Money Network “may disclose information to third parties about your Card account or the transactions you make” to many parties including “affiliates [and] service providers.”

“This ambiguous language raises serious questions about whether Money Network Financial is permitted to sell personal information of individuals who activated stimulus payment debit cards,” the Senators letter states. Given that individuals who received their stimulus payment by direct deposit or paper check are not subject to these provisions, it would seem unfair to force prepaid card recipients to give up their right to privacy just to access their money.

The Senators rightly ask for Mnuchin and Treasury to validate if Money Network is permitted to give American’s personally identifiable information to affiliates and service providers “for marketing or any other commercial purposes not necessary for the activation or use of the debit card.” They also request information about how Money Network is storing and using the information provided and whether the Treasury Department is performing any oversight.


While the use of prepaid cards was a novel idea, there were myriad missteps in getting them into the hands of struggling American’s in a timely and effective manner. The forced use of arbitration and potential sale of personal information also show that Americans receiving prepaid cards are disadvantaged in other ways compared to those receiving economic impact payments via direct deposit or paper check. It behooves the Treasury Department, or another body like the Consumer Financial Protection Board, to step in to correct these egregious imbalances and protect the rights of Americans.

Further Reading:

Here’s What To Do If Your Stimulus Visa Debit Card Arrives With The Wrong Name

1.1 Million Stimulus Checks Sent To Dead People, Watchdog Finds

Senators Unveil Bipartisan Proposal To Exempt CARES Act Stimulus Checks From Private Debt Collection

These 3 Factors Will Determine If You Get A Second Stimulus Check

Second Stimulus Checks: 3 Most Critical Dates To Keep In Mind

Second Stimulus Check Update: Skepticism From Unexpected Source

Get My Payment: IRS Formally Addresses What To Do If Your Stimulus Check Amount Was Wrong

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