12 ON YOUR SIDE : Tax return debit card problems

RICHMOND, VA (WWBT) - Some Virginia taxpayers who were mistakenly charged fees for using the state's new tax refund card are now getting reimbursements. 12 On Your Side has been tracking the debt card debacle for several weeks.

This is the first year that taxpayers could use the Way2Go card to get their refunds. The refunds are loaded onto the card, which works like a debit card. The calls and emails about problems came into our newsroom the moment the refunds started going out.

The new tax refund debit cards are suppose to be convenient for taxpayers and cheaper for the Commonwealth. Turns out, a myriad of fees is making people mad.

The debit cards are new in Virginia. The Taxation Department said getting rid of paper checks would save the state $20,000 a year. The cards come with instructions and a fee schedule.

12 On Your Side is hearing from people who don't have good things to say - in fact, they're urging the state to go back to paper checks. Fees are eating up their state tax return.

Not large amounts but, they say it's unfair to be nickeled and dimed to spend your own money.

The Taxation Department says there were some start-up bumps but problems are getting resolved as they turn up.

David Browning is an accountant. It's his job to inspect. So, when he spotted a questionable balance on his card, he called the company and discovered - there's a fee for that.

"I'm suppose to get two free calls under that scenario. I only made one call. But, I was charged twice," said Browning.

A cash withdrawal fee, another to transfer funds, a fee for not using the card. Two bucks here, three there, a smaller amount here... it may be small change, but people are livid and say the instructions are complicated and untrue.

"I never got any free calls. Each call that I made was a dollar," said Browning.

"This is your tax refund," said Christa Vidonic, who is also upset about the card. "This is money that you should be getting back. I shouldn't have to pay someone else to use my own money."

Xerox Corporation runs the debit card program, called 'Way2Go'. Xerox also administers unemployment benefits and food stamps for the state.

The Taxation Department said "more than 200,000 refunds have been issued on debit cards" and they've seen fewer problems than expected.

It's primary issue has been with bank transfers. It says taxpayers are entitled to a free transfer, and about two dozen people were inadvertently charged a fee for putting the money in their own bank accounts. "The fees have been reimbursed and the issue resolved," according to the Taxation Department.

Leslie Haley is a lawyer and says she fought hard to get money returned that was taken from her daughter's small tax return.

"I want the state to know this is broken," said Haley. "It says it can be negotiated as a debit card at any place that accepts MasterCard, which I found to be untrue."

The state also says the program's website and phone system were both incorrectly stating all transfers carry a fee.

Virginia Department of Taxation Spokesman Joel Davison tells the Richmond Times-Dispatch that most issues have been resolved. He says fewer than 10 reimbursement checks have been mailed to taxpayers so far.

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