CHARLESTON, W.Va. -- Unemployed workers in West Virginia soon will be able to have their checks deposited directly into their checking accounts, as state officials react to complaints over the prepaid debit card system.

Direct deposit could be available as soon as Nov. 1, Workforce West Virginia spokeswoman Jama Jarrett said last week.

Once the new system starts, the agency will notify everyone who now uses Chase Visa unemployment debit cards and offer a choice between the card and direct deposit. New clients will also be able to pick between the two.

Workforce West Virginia also is offering checks to beneficiaries until it sets up direct deposit.

That's a good thing, say consumer advocates. They're concerned about the growing use of debit cards for government benefits because of the fees banks collect from card users.

But they say the state also should permanently offer benefits through old-fashioned checks.

"All three of those options should be open to people, and it is only if they choose the card should they have the card given to them," said Judy Conti, federal advocacy coordinator at the National Employment Law Project. "People need to have choice."

West Virginia also uses Chase Visa debit cards for child support payments.

States like the cards because they save on costs like postage and replacing lost checks. But consumers end up footing the bill.

Chase collects fees whenever West Virginians with unemployment cards withdraw cash from non-affiliated ATMs, pay their bills online, or check their balances at non-affiliated ATMs, among other transactions.

A recent computer glitch also charged people $2.75 to withdraw cash from Chase ATMs, even though those transactions are free under the state's contract with JPMorgan Chase. The company says it has refunded all incorrect charges.

Debit cards work for some unemployment recipients, especially those who can't afford to open bank accounts, Conti said.

"We don't discourage the use of them at all," Conti said. "It's a very good option and alternative if the terms are fair, and people have adequate warning of what those terms are."

'You're taking my kids' money'

West Virginia's child support debit card program got off to a rocky start in 2005. State lawmakers criticized the numerous fees charged by BB&T, which provided the cards at the time.

Now that the state contracts with JPMorgan Chase, recipients pay fewer fees, said state Bureau for Child Support Enforcement Commissioner Susan Perry.

Child-support recipients who use the cards get unlimited point-of-sale transactions; four free monthly withdrawals at Chase ATMs; and unlimited balance checks at Chase ATMs and the bank's Web site, among other free services, she said.

As with other debit cards, recipients can go into any Visa-network bank -- which is almost every bank in the country -- and withdraw money at the teller window for free, Perry said.

Many of the bureau's clients don't have bank accounts, Perry said. Others have had checks stolen from their mailboxes. Over the years, the state also had to replace many destroyed checks whenever flooding hit the state.

Direct deposit could be available as soon as Nov. 1, Workforce West Virginia spokeswoman Jama Jarrett said last week.

Once the new system starts, the agency will notify everyone who now uses Chase Visa unemployment debit cards and offer a choice between the card and direct deposit. New clients will also be able to pick between the two.

Workforce West Virginia also is offering checks to beneficiaries until it sets up direct deposit.

That's a good thing, say consumer advocates. They're concerned about the growing use of debit cards for government benefits because of the fees banks collect from card users.

But they say the state also should permanently offer benefits through old-fashioned checks.

"All three of those options should be open to people, and it is only if they choose the card should they have the card given to them," said Judy Conti, federal advocacy coordinator at the National Employment Law Project. "People need to have choice."

West Virginia also uses Chase Visa debit cards for child support payments.

States like the cards because they save on costs like postage and replacing lost checks. But consumers end up footing the bill.

Chase collects fees whenever West Virginians with unemployment cards withdraw cash from non-affiliated ATMs, pay their bills online, or check their balances at non-affiliated ATMs, among other transactions.

A recent computer glitch also charged people $2.75 to withdraw cash from Chase ATMs, even though those transactions are free under the state's contract with JPMorgan Chase. The company says it has refunded all incorrect charges.

Debit cards work for some unemployment recipients, especially those who can't afford to open bank accounts, Conti said.

"We don't discourage the use of them at all," Conti said. "It's a very good option and alternative if the terms are fair, and people have adequate warning of what those terms are."

'You're taking my kids' money'

West Virginia's child support debit card program got off to a rocky start in 2005. State lawmakers criticized the numerous fees charged by BB&T, which provided the cards at the time.

Now that the state contracts with JPMorgan Chase, recipients pay fewer fees, said state Bureau for Child Support Enforcement Commissioner Susan Perry.

Child-support recipients who use the cards get unlimited point-of-sale transactions; four free monthly withdrawals at Chase ATMs; and unlimited balance checks at Chase ATMs and the bank's Web site, among other free services, she said.

As with other debit cards, recipients can go into any Visa-network bank -- which is almost every bank in the country -- and withdraw money at the teller window for free, Perry said.

Many of the bureau's clients don't have bank accounts, Perry said. Others have had checks stolen from their mailboxes. Over the years, the state also had to replace many destroyed checks whenever flooding hit the state.

Before the program started, the bureau had a full-time employee devoted to canceling lost checks and re-issuing them, Perry added.

Linda Mangus, a paralegal in Charleston, said she always liked her child support card's convenience. She used it to buy things such as school supplies for her two kids.

But recently, she noticed a $1.50 charge for using her card at a Chase ATM -- even though she hadn't used the card at an ATM four times that month. The ATM didn't warn her about the charge. 

She called the bank to complain.

"I said, 'That is money that was awarded to me by the court system for my children. And you're taking it.'"

She then called the state to switch to direct deposit.

Recipients can switch between direct deposit and debit cards at any time, Perry said.

The bureau offers printed checks only to a handful people, like those who can't have debit cards or bank accounts.

Clients told they couldn't get checks

The National Employment Law Project is working with the United Auto Workers, the National Women's Law Center, and the National Consumer Law Center to create federal legislation to protect users of all debit cards issued for government benefits.

They want recipients to be able to choose between all three payment methods, Conti said. Among other protections, they also want to eliminate certain fees, such as charges for inactive accounts and declined transactions.

Mountain State Justice lawyer Jennifer Wagner said the state also needs to simply give people more information. She's gotten complaints about Workforce West Virginia's program.

 "There was very, very little information given about it, so one of my clients almost threw it away because she thought it was a solicitation," she said.

Some people in rural areas don't live anywhere near a Chase ATM, she added.

And even though Workforce West Virginia officials have said they've always offered checks to people who complained about the debit cards, Wagner said her clients were turned away when they visited the agency to request checks.

Not only do banks collect fees on people who use the cards, they also charge businesses that accept them, she said.

"Chase is making a lot of money out of this arrangement," she said. "Rather than that money going toward unemployment compensation, it ends up going to the corporations."

Reach Alison Knezevich at alis...@wvgazette.com or 348-1240.