Prepaid improves efficiency for Maryland

Cost savings and process efficiencies for the state and improved convenience and security for recipients


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A total of 270,000 Citi prepaid cards have been issued to unemployment benefit claimants as a means of receiving their payment by the Department of Unemployment Insurance in Maryland since December 2008, resulting in huge cost savings and process efficiencies for the state.

Original estimates suggested the program would save Maryland around $400,000 annually. However, the recent economic crisis has increased the number of claimants, saving the state even more – around $3.5 million by early 2011.

"We were looking for a way of delivering benefits in a more secure fashion than posting checks," said Jim McVicker, Maryland's deputy director for Contributions. "Whenever you post something you run into problems, such as checks being lost or stolen. Customers would ring us up and say 'Where's my check?', then have to wait 10 days to receive another. We also ran into problems with checks being forged."

In 2005, following a drop in its funding allocation for postage, the department decided to seek permission from the State Treasurer's Office for a prepaid solution.

"It just became obvious to us that it was a win-win situation for both us and benefits claimants," said Julie Squire, director of Maryland's Unemployment Insurance program. "Many benefit claimants didn't have check accounts, so they were paying $20 or more to cash each benefit check. We wanted a solution that meant they could receive their benefits for free."

The department is able to handle all processing in-house with a reduced number of shifts and fewer personnel, and there is no longer any need for a clearance program to deal with unused cash. "The fees charged are also minimal compared to other banks because Citi does a lot of business in the prepaid cards market," said project manager Dee McElroy.

Claimants now receive their money on the day it is sent and can buy necessities immediately. Citi sends the department a weekly report that shows where cards are being used. In addition, claimants are able to check their spending and available balance via Citi's website.