When rumors circulated earlier this week that people could get a $500 gift card for groceries, we knew there had to be a catch. There was.
To qualify for the grocery card, people had to apply for a prepaid debit card and put a certain amount of money on that card. The cards carried fees that could eat away the card’s value over time. Besides that, it was unclear whether anyone would actually get the grocery money or how they would get it.
Prepaid debit cards are like some gift cards: They carry fees and restrictions on their use that can use up part of their value or make them less convenient to use. The BBB advises consumers to ask lots of questions before signing up for any gift or debit card.
- Check the fine print to determine what fees are associated with the card. Some typical fees could include transaction fees, maintenance (monthly) fees or inactivity fees.
- See if the card has an expiration date. Are there fees to obtain a new card or load more money on the card?
- Check the terms and conditions on a debit card. Can it be used at an ATM machine? What fees are charged if you access money through an ATM?
- Check out the organization or bank that is offering the card. Free BBB Business Reviews are available at the BBB website or by calling the BBB at 314-645-3300.
Today’s release details what BBB Investigator Bill Smith found out about the situation earlier this week outside the Power House Church in St. Louis:
St. Louis, Mo., Aug. 17, 2012 – The Better Business Bureau (BBB) is urging caution to anyone considering doing business with representatives of Advanced Marketing & Promotions (AMP), an Alabama-based business managed locally by Dean Stanley.
The warning comes in the aftermath of an event near St. Louis Power House Church this week in which St. Louis area residents were offered $500 worth of food vouchers in return for signing up for a prepaid debit card. Police were called to the 4000 block of West Florissant Avenue on Tuesday after hundreds of people jammed an area near the church to fill out applications for the cards. The event ultimately was shut down.
Michelle Corey, BBB president and CEO, said that the situation could have been much worse had it not been for the quick action of law enforcement. “It seems that nobody wants to accept responsibility for what happened,” Corey said, “but it is becoming increasingly clear that officials with St. Louis Power House Church and AMP played key roles. It also seems that the people who went to that area hoping to get free food for their families may be the victims in this fiasco.”
Stanley, who came under news media scrutiny last year for his role in a federal cell phone giveaway program, said he had spoken with an official of Power House Church about hosting a debit card sign-up event. Stanley said the official, Howard Walker, told him that he believed the event would be a good way for the church to raise money for its programs. Walker reportedly would receive 75 cents for each application submitted.
Stanley said he had been told that each applicant would receive a voucher for $500 in free food, but he told the BBB he could not provide proof of the offer or say whether anyone ever had received such a voucher. Stanley said that when word began circulating about the voucher giveaway, “everything blew out of proportion.”
Stanley said he spoke to Gordon Cooper, his boss and the head of AMP, on Wednesday. Stanley said Cooper told him to say that “Mr. Walker was solely responsible for what happened.”
Cooper has not responded to BBB requests for information on the debit card signup program.
Walker, who described himself as the head of Power House Church, said the church was never directly involved in the debit card signup program. He said he was acting as an independent contractor, describing himself as a “guinea pig” to determine whether the program might eventually be used to raise money for St. Louis Power House.
Walker said he had met Stanley earlier this month and had never been involved with anyone else with the firm. He said he had never spoken to Gordon Cooper, described as head of AMP. Asked about the $500 food voucher offer, Walker said, “I should have done more research on that. Where that $500 comes from, I have no idea. I really believed what they (AMP) were telling me.”
Walker said he got involved because “I love helping people.” He said the problems Tuesday “scared me. I had no idea this many people were going to show up. It’s outrageous.”
The debit card program calls for monthly fees of either 99 cents or $4.95, depending on how much money is loaded onto the debit card. To get the lower fee, a consumer is required to put $500 on the card.
Walker said that St. Louis Power House Church works to remove people from the street and find them housing. The church website says that “our calling and passion is to reach the lost and bring them to an accurate knowledge of the truth of Jesus Christ.”
The BBB offers the following tips on applying for reloadable debit cards: