Complaints On New Tax Refund Debit Card

Lynchburg, VA - Some Virginians getting their state tax refund aren't happy about it. The problem's with the new way the state's giving people their refund. They replaced paper checks with debit cards, and complaints came rolling in.

A couple issues have come up with the debit card, but the main one is some people have been charged a transfer fee when they moved money from their debit card to their bank account. That should not happen, and tax places are warning their clients.

It's the same every April. Folks at Liberty Tax Service are hard at work tackling tax refunds. But this year brought a whole new challenge: Tax refunds delivered on a shiny, plastic, debit card. But, not everyone's opting for the plastic.

"There's just been so much hesitation with it with our clients. So many people were saying, 'Why this debit card?'" said Leslie Neumann, manager, Liberty Tax Service in Lynchburg.

We asked the same question: Why the debit card? Turns out, to save a buck - $200,000 in fact - the General Assembly voted to do ditch the paper check tax return many have gotten for years for the debit card. The benefits include security, convenience and no more check cashing fees, but the negatives are clear, just look at Facebook comments about the debit card: "Had to go to two different ATM's just to get ours since our bank wouldn't accept it," wrote one person. And, "They are such a bad idea," wrote another on our WSET Facebook page.

The state Department of Taxation says they've gotten two dozen complaints so far about transfer fees that were not supposed to happen. Those Virginians got their money back. ABC 13 called the State Department of Taxation. They're working with Xerox, the company behind the card, to work out the kinks.

"When anyone has a problem, we want to get to the bottom of it, fix it and make sure that person is satisfied," said Joel Davison, VA Dept. of Taxation.

For CPA Susan Ackley, the newest technology isn't always the best technology. She tells her clients to stick with direct deposit, at least for this tax season.

"They'll get the kinks worked out eventually," said Susan Ackley, CPA, Brown, Edwards and Co in Lynchburg.

We want to be clear that some will still get a paper check in the mail, like those under 18 years old, as well as people with an amended return. But, it's the exception, not the rule.

The state admits this debit card is a big program, and it's going to hit a few speed bumps, but they are closely monitoring.