How My Donation Was Spent

Debit Cards Buying Luxury
Items

High-priced handbags and top-dollar
shoes are only some of the luxury
items being paid for with American
Red Cross debit cards issued to storm
evacuees. (Report Debit Card Abuse:
404-876-3302)

Red Cross officials told 11Alive’s
Jennifer Leslie the problem is
isolated, saying the vast majority of
the estimated 37,000 families that
received the debit cards have used
the funds to buy valid emergency
supplies.

The cards were given out weeks ago
and intended to financially enable
people who lost almost everything to
Hurricane Katrina to buy basic
necessities. The only items
considered to be off limits are
alcohol, tobacco and firearms.

When the American Red Cross began
handing out the cards to the
evacuees, each person was required
to sign a statement that denoted what
they are supposed to do with the funds.

Red Cross spokesman Bill Reynolds
said, “The money they're receiving
through financial assistance is to go
specifically for the purposes for which
it's intended, such as food or clothing
for their children.”

But, 11Alive discovered some
evacuees used the cards – which
were credited with as much as $1,800
– to make extravagant purchases. At
Phipps Plaza in Buckhead, workers at
the Cole Haan store reported selling
shoes that cost $200 a pair to at least
20 customers who used Red Cross
cards.

In fact, one customer’s bill
approached $700, a Cole Haan
worker said.

A small number of evacuees also
made debit card purchases at the
Coach store, where the average price
point is $250.

The manager at one store said
employees were given the option of
refusing to sell to anyone who was
using the debit card to pay for a
potentially inappropriate purchase.

Reynolds said, “It's terribly unfortunate
that some people choose to do that
with the donated dollar from the
American public.

“If a merchant suspects a case of
abuse … reporting that to the Red
Cross would be appreciated. We can
follow up and actually have the
remainder of the balance if we deem
so,” he said.

At the same time, Red Cross officials
noted that some expensive purchases
can be justified. For instance, an
evacuee may need furniture for a new
apartment or a nice suit for job
interviews.

Reynolds said, “If there's something
that's questionable on there, we
certainly can cancel out the
remaining amount that's on the card."

If the debit card runs out of money,
the Red Cross can review the card’s
purchase history before giving an
evacuee additional assistance. Red
Cross officials said that anyone
accruing inappropriate expense could
have their card discontinued.

That said, the extravagant purchases
are not considered illegal and there is
currently no way to press charges
against a person who abuses their
card.

“It’s technically to my knowledge not a
law violation for anybody to do that,"
Reynolds said.

Web Editor: Sean Rowe
Reported By: Jennifer Leslie
Last Modified: 9/23/2005 3:23:30 PM