Service fees for I-776 refunds rile vehicle owners

By Peter Lewis
S eattle Times consumer-affairs Reporter

Olympia, WA - The state Department of Licensing has mailed Initiative 776 refund checks to more than 2.3 million vehicle owners, but some consumers are running up against a bank policy that makes cashing the checks expensive.
"This outraged me — that money I paid to the state for a fee that was found to be illegal will end up costing me $5 per check to cash," complained Nick Reynolds of SeaTac.

Reynolds had walked into a Bellevue area Bank of America branch with two $15 checks drawn on the Bank of America. He walked out when the bank insisted on taking a third of the money as fees because he is not a regular customer.

So far, state officials say they have fielded about 30 calls from consumers upset about the service-fee policy. DOL spokesman Brad Benfield yesterday acknowledged the state had not factored the bank's check-cashing fees — and the response by consumers — into account when it awarded the bank a contract to process the refund checks.

Among other things, Initiative 776 repealed the $15 annual vehicle-license fees charged by King and Pierce counties, as well as the state's weight fees on light trucks.

Opponents challenged the measure's constitutionality, and the Licensing Department continued collecting fees until the Washington State Supreme Court upheld I-776 last fall.

Refunds were delayed while the court considered follow-up motions. The state treasurer later accepted proposals from various financial institutions interested in participating in the refund process, and Bank of America was the low bidder.

The state expects to pay Bank of America about 46 cents per check, which works out to more than $1 million. However, the bank's postage and printing costs alone add up to 36.5 cents per check, Benfield said.

Bank of America spokesman Harvey Radin defended the fees, saying the point is to discourage noncustomers from taking up time and resources that could be devoted to customers.

Vehicle owners entitled to refunds include anyone who paid a county vehicle-license fee between December 2002 and November 2003 and any light truck (4,000-10,000 pounds) owner who paid a weight fee between February and November 2003.

The checks, ranging from $7 to $40, were mailed last week. Vehicle owners who are entitled to a refund but haven't received a check by next Monday should phone the agency's I-776 hotline, 1-866-520-4365. More information is available online at www.dol.wa.gov




Times staff reporter Eric Pryne contributed to this report.

Peter Lewis: 206-464-2217 or plewis@seattletimes.com

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