Local woman warning others about company holding tax refund hostage

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by Mike Colombo / News 4 and KMOV.com staff

KMOV.com

Posted on February 26, 2013 at 5:46 PM

Updated Tuesday, Feb 26 at 6:01 PM

A local woman wants to warn others after a big tax refund was seemingly held hostage when she chose a new way to receive her funds.

Jennifer Neuendorf did her taxes online this year and, like usual, used Turbo Tax.

But this time, she did something different.

“Up pops the screen that says, ‘would you like your refund deposited on the Netspend card? It’s the fastest and easiest way to get your refund.’ Yeah sure, what the heck,” Neuendorf recalls.

Netspend is a pre-paid debit card.

Neuendor’s federal refund came fast, but Jennifer couldn’t get to it.

“When we tried to activate the card, ‘oh, well, we need address verification, social security card, and current I.D. before we activate the card,” she remembers.

Netspend employees say it will need to verify a customer’s identity. It’s explained in the details listed in a drop-down bar.

But Neuendor says that was a surprise to her. She said she did not know any of that type of stuff would be needed when she signed up.

Providing that information turned into an ordeal. No faxes or emails were ever returned.

“I about had a nervous breakdown, I was in tears, I was crying, they weren’t releasing our money to us,” said Neuendor.

Netspend is based in Austin, Texas. A spokeswoman would not do an interview, but did offer an explanation.

She says Netspend has to follow federal regulations for verifying identity.           And then Neuendor’s account was flagged as high-risk for fraud, which led to even higher scrutiny.

Adding to the problems, Neuendor’s first fax was illegible and she had to send everything in again.

“I just felt like we had to beg them for our money,” she said.

After nine days, she finally received her money.

Netspend told News 4 their robust security measures are critical, considering the IRS reports more than $5 billion in refund fraud each year.

Netspend has an ‘A’ rating with the Austin Better Business Bureau.

Bottom line, pre-paid debit cards can be useful in some situations. But if you have a bank account, that might be a better option for your refund.

 

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