Earlier this month, we shared Victoria’s frustration after she tried to redeem what she thought was a gift card. She and her mom Catherine Shahinian learned the card was something else entirely.
It was a prepaid MasterCard debit card issued by Green Dot. In order to activate the card via a toll-free number, Catherine Shahinian was asked for personal information, including her Social Security number.
Giving that kind of personal information for a gift card didn’t sit well with Shahinian, so she contacted Bamboozled.
We talked to Green Dot, the company that issued the card. It said the card is not a traditional gift card, but a reloadable debit card that’s meant to be used in lieu of a checking account. That’s the reason for the personal information request, Green Dot said. The card is also subject to fees, which had eaten up Victoria’s initial balance.
Before the story ran, Bamboozled reached out to Green Dot about the issue. Green Dot explained the differences between its card and a traditional gift card, but it didn’t offer to help — until after the story was in The Star-Ledger.
We wanted to thank the company for doing the right thing, but we also wanted to know how it was able to add the money without a Social Security number if, as Green Dot said last time around, the Patriot Act requires “all financial institutions to obtain, verify, and record information that identifies each person who opens an account.”
Simple, said Green Dot Chief Operating Officer Will Sowell. The company converted this particular card to a non-reloadable card — a different product classification — so Shahinian wouldn’t have to provide her personal information.
After reading about the Shahinians in this column, Sen. Robert Menendez asked us to put his office in touch with the mom and daughter so he could invite them to join an early December press conference, at which he announced “The Prepaid Card Consumer Protection Act of 2010,” legislation Menendez said would address “hidden prepaid debit card fees.”
Catherine Shahinian decided to attend, she said, because she feels the public should be aware of the fees associated with these cards, which are very different from traditional gift cards.
‘‘It was never about the money,” Shahinian said. ‘‘It’s so the public can be privy to this.”
The Shahinians used the Green Dot card to purchase a supermarket gift card, which they gave to the Open Cupboard Food Pantry in Clinton though Victoria’s Girl Scouts troop. The card will be added to a holiday gift basket for a needy family.
A MOLASSES REFUND
Cynthia Bowker is a very patient woman.
Her mom Elizabeth Light died in Newark on Jan. 5, and in February, Bowker, of Knoxville, Tenn., paid $61 for 10 death certificates from the Bureau of Vital Statistics.
By April, Bowker learned the check was cashed but she had not received the certificates. She went to Newark City Hall and got them in person. She then tried and tried to get a refund for the certificates she never received.
Bamboozled got involved, and in September, the bureau’s registrar said Bowker would receive a refund in 30 to 60 days.
Bowker waited. No refund.
She contacted Bamboozled again in early November, and we again called the bureau. After several weeks of back-and-forth, Bowker finally received her refund Dec. 4.
What took so long?
“We sincerely apologize to the family for the delay in issuing the refund,” a spokeswoman said. “This will improve not only the tracking system in vital statistics but also the City’s ability to more efficiently provide services to our citizens.”
Bowker says she hopes so.
“They apparently didn’t even start working on it until hearing from you again,” she said. “There is definitely something wrong over there in Newark City Hall and I hope they get it figured out.”
RAFFLES AND TAXES
Our story about the Edison couple who won a raffle at a Garden State Arts Foundation senior concert — and then waited weeks to be paid when regulations said payment should have been on site — raised some interesting questions about raffles.
Several readers said they had won contests in which they had purchased raffle tickets as partners with friends, but the sponsoring organizations refused to give separate payouts to the winning partners. The groups insisted on paying the entire prize to only one person.
“I’m assuming this payout will be reported to the IRS,” said one winning reader, who asked not to be identified. “Do you know how taxes are handled?”
She said she and her partners split the winnings three ways and they estimated the taxes owed, which meant a few extra bucks to the “winner of record” to cover the tax expense.
Not right, said Bill Quinn, spokesman for the state Treasury Department.
“It would be appropriate for the sponsor to pay the prize money in equal shares to the winners,” he said.
Each partner would be responsible for reporting the winnings as income and paying tax on it, Quinn said.
“Allowing the holder of the winning ticket to keep a share of the money to cover taxes would not relieve the partners from tax liability on their share of the winnings,” Quinn said.
If you partner with someone and win a raffle but the organization refuses to recognize more than one winner, here’s the right way to report your winnings.
The winners who did not receive a tax form should report their share on Page 1 of Form 1040 (Other Income), said Howard Hook, a certified public accountant and certified financial planner with Access Wealth Management in Roseland. Write the words “Raffle” or “Drawing” in the column next to the number so the IRS knows the nature of the income.
The winner of record should also report their share on Page 1 of Form 1040, writing “See Attached Note” in the column next to the number. On an attached sheet, write the amount of the total winnings reported on the tax form, and underneath, write the amount allocated to the other winners. Finally, show the net amount that corresponds to the amount reported on page 1 of Form 1040, Hook said.
If the winner is the gambling-type, remember that New Jersey allows a deduction for gambling losses during the year.
By the way, no word yet on whether or not the Garden State Arts Foundation will change its longstanding practice of not paying raffles at the time of the drawing. We’ll keep you posted.