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Hurricane Ike slammed into Galveston, Texas, in the early hours of Sept. 13, 2008, as a Category 2 hurricane with sustained winds of 110 mph. The American Red Cross is coordinating with other disaster relief organizations to provide food and shelter to hundreds of thousands of displaced Gulf Coast victims. Part of the Red Cross' efforts will soon involve the distribution of prepaid cards.
Since Hurricane Isabel in 2003, the Red Cross, working with J.P. Morgan the Treasury arm of JPMorgan Chase & Co., has had a prepaid card program in place that allows for efficient distribution of financial assistance to disaster victims.
According to Michael Brackney, Director of Service Delivery Development at the Red Cross, card distribution is part of the individual assistance phase of the relief operation. The Red Cross and other organizations, such as the Federal Emergency Management Agency, are still in the mass care phase of the operation, which takes care of peoples' basic needs. It is also a time when authorities assess the damage to communities.
"For example, in Galveston right now, there's no running water, no electricity," Brackney said. "So prepaid cards are not going to do you any good."
Phase two
But once basic utilities, such as water and power, are restored to hurricane affected areas, relief efforts can be focused on individuals, he said. At that point, Red Cross case workers sit down with individual families and assess their situations.
"When power comes back on in some areas and some people can leave the shelters and go home, it will become clearer who can or who does or does not have a home to go to, who is going to have longer term needs," Brackney said.
"And once Red Cross workers establish identity, eligibility, how they were affected and what their individual needs are, then assistance is provided in accordance with that," he added. It is here that prepaid cards enter the mix. Instead of giving victims clothing or other supplies, the Red Cross can issue them prepaid cards for making purchases.
"What we want is to give people the emergency assistance they need or the means to acquire it," Brackney said. "For example, if they need medicine or a certain size of clothing, it's better and easier and less expensive for us to give them the means" to get it themselves. But prepaid cards are not just used in large scale disasters like Hurricane Ike or even bigger catastrophes like Hurricane Katrina of 2005. The Red Cross employs cards for individual home fires and other emergency situations.
From an economic standpoint, Brackney said the cards were "phenomenal" in reducing overhead costs for the Red Cross, after having used a paper-based system of relief fund disbursement for 70 years.
Other efforts
The Red Cross' Disaster Relief Fund supports victims with shelter, food, counseling and other assistance.
Part of that support is the Text 2HELP Initiative, a partnership between the Red Cross and the Wireless Foundation, which allows wireless phone users to type in a simple text message – the keyword "GIVE" to the number 24357 ("2HELP") – to automatically donate $5 for disaster relief. Contributions appear on monthly bills or are debited from prepaid card accounts.
Prepaid cell phone provider TracFone Wireless Inc. has also extended its service expiration dates for its customers in the hurricane affected areas. Subscribers with expiration dates in the next 10 days will receive an extra 10 days of service at no extra charge.
A vital role
Since 1999, J.P. Morgan has issued prepaid debit cards for use in emergency relief situations. Hurricanes Katrina and Rita magnified the importance of debit and electronic benefits transfer (EBT) cards as a part of the United States' emergency response infrastructure.
"I would say that Katrina didn't highlight the need for cards, but it did their validity," Brackney said.
J.P. Morgan issued over 414,000 emergency food stamp benefit EBT cards in Louisiana for victims of those hurricanes.
J.P. Morgan also converted Louisiana unemployment checks to debit cards, which allowed over 300,000 cards to be issued to unemployed Louisianans to access their funds even if they had relocated to other states after Hurricane Katrina.
Back in 2001, in the aftermath of the terrorist attacks on the World Trade Center and The Pentagon, J.P. Morgan said it restored EBT services to over 1,200 small retailers in Lower Manhattan after the attacks destroyed telecommunication switches in the World Trade Center, shutting off the retailers’ ability to accept EBT cards. J.P. Morgan coordinated with retailers and the government to keep benefits flowing.
from SP E-Magazine