WASHINGTON - Consumer groups, states and even banks that issue unemployment insurance (UI) debit cards are quick to note that hidden fees may take users by surprise, if they don??t read the fine print.

Stateline.org writes that many out-of-work Americans in about 30 states receive their unemployment benefits directly deposited into their checking accounts, of which funds are accessed with a UI debit card. Workers have quick access to their benefits and states save money. Folks without bank accounts can avoid check-cashing fees and make purchases with their card. However, some folks are opting not the use the card because of the hidden fees.

"If you are issued your unemployment benefits on a prepaid card, be sure to read the terms and conditions," Suzanne Martindale, an associate policy analyst at Consumers Union, told the news source, adding that the U.S. Labor Department offered guidance to states, outlining "best practices" for using UI debit cards, such as: eliminate overdraft charges; allow for more than one free ATM withdrawal per payment and don??t charge fees when the card is used to make purchases.

Like any debit card, fees and requirements vary from card to card, and those who use the cards like regular consumer debit cards will encounter fees "for checking their balances, using ATMs multiple times or calling customer service," notes the news source. Cards issued by the same bank can also have different rules in different states.

Lyle Beckwith, NACS senior vice president of government relations, commented to NACS Daily that this trend is "a tax increase on the consumer, as these cards carry the same swipe fee as credit cards, which is borne by the merchant and passed on to consumers. Well-meaning state officials, in their zeal to lower costs in the face of tax revenue erosion, have mistakenly assumed that by 'offloading?? benefits processing costs to branded cards, have increased the costs through supra-competitive pricing by Visa and MasterCard."

Beckwith added that these cards are not covered under the Wall Street Reform Act of 2010, enacted by Congress last year, therefore allowing banks issuing these cards to raise fees to the merchant and consumer at will, thus taking the accountability of this government responsibility out of the democratic process.

This Congress, lawmakers are "eyeing new rules" that would include prepaid cards issued by states. Senators Robert Menendez (D-NJ) and Richard Durbin (D-IL) would seek to limit the fees on all prepaid cards to create "a new framework to ensure consumers aren??t fleeced by prepaid cards," according to Menendez.