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JP Morgan to exit prepaid card biz

JPMorgan Chase plans to sell or exit over time its business of issuing prepaid cards for corporate payrolls and government tax refunds and benefits. The cards, which had been offered with cash and treasury services to companies and governments, had become a headache of risks in operations and regulations, says a company source. Last month JPMorgan warned some 465,000 holders of the cards that their personal data may have been accessed by computer hackers who attacked its network in July. The company mailed incorrect replacement cards to some 4,000 people receiving payments from the state of Connecticut. The state treasurer blasted the bank for its obvious lack of attention to detail. Employers have said that they offer the cards to employees as an option along with paper paychecks and direct deposits to bank accounts. Even with the fees, they can be cheaper than check-cashing services. But there have been complaints that direct deposit choices are hard to exercise and a lawsuit was filed against a McDonald’s franchisee by an employee who claimed she was required to use a JPMorgan Chase payroll card.

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