Disgruntled Lorrains, some pandemic gift cards issued by the city have lost value

LORAIN, Ohio — Leighann Arroyo and other Lorain residents report they were stunned to learn that city-issued $10 pandemic gift cards unexpectedly lost more than half of their face value.

News 5 has confirmed that the $10 gift cards have been distributed by the Town of Lorain since July 2021 as a thank you to residents who received the COVID-19 vaccine or showed proof of vaccination.

Lorain Mayor Jack Bradley told News 5 the city used $59,925 of America Rescue Plan Act funds to pay the MetaBank National Association to process 5,150 $10 gift cards, including 8,425 $ in processing fees. But Bradley told News 5 that he was unaware that the city’s contract with MetaBank included a gift card value reduction clause that provided the cards would begin to lose their $10 face value if they weren’t sold. were not used within a year.

Bradley said the contract with MetaBank was incorrectly signed by a member of the city’s building and housing department and not verified by Lorain’s legal department, which is outside of city protocol. The situation has left some Lorain residents like Arroyo wondering how such a thing could happen, as the city now faces the potential loss of thousands of federal dollars in the event of a pandemic.

“I thought there was $10 here and it’s only $4.10,” Arroyo said. “The city needs to do better research. That’s what they get paid for.”

“It’s very important, people rely on that, $10 can go for dinner that night for people who may not have food stamps or gas in the car to get to at doctor’s appointments.”

Lorain’s general counsel, Mary Springowski, said the incorrect verification of the contract with MetaBank for gift cards raises a series of questions.

“There’s a $2.95 inactivity fee, and that’s what eats it all up, where does that money go, because there’s also something that says the funds don’t expire,” said Springowski. “Some residents are quite upset and they want to know why this was given out, why it was worth $10, when it’s not worth $10.

“How many cards have you dealt at different times for the least amount and how many are left, that money kind of evaporated, and that’s not what that money was supposed to be for. It’s absolutely condemnable. This shouldn’t have happened. If people were doing their due diligence and doing the job they’re supposed to do, this shouldn’t have happened.

Mayor Bradley told News 5 that he is now using his legal department to work with MetaBank to see if some of the funds lost in the pandemic by lowering the value of gift cards will be restored by MetaBank, even though Bradley said that ‘it appears that MetaBank has no legal obligation to do so.

Bradley explained that there are some 1,200 gift cards that still haven’t been distributed and are losing value.

“We’re trying to stop losing value on these cards and redeem them,” Bradley said. “We are trying to see if we can get relief based on the fact that the contract was not properly executed, as it was not approved as to form by our legal department.”

“It’s just good customer relations, so I hope that MetaBank, through the efforts of the legal department, will do the right thing and realize that the contract has not been properly verified.”

News 5 contacted MetaBank about our story and released the following statement:

“Although it is our policy not to discuss the details of our agreements, we are actively investigating this matter. The results of our investigation will be reported directly to the city.”

News 5 will follow up on this developing story.

Meanwhile, Lorainers like Leighann Arroyo hope the city does a better job administering some $32 million in ARPA funds that are expected to be distributed in the near future.

“City officials need to do a better job of reading the fine print, reaching out to businesses, and getting to the truth,” Arroyo said. “Instead of telling people there was money here when there really wasn’t.”

Michael N. Clark