The state has suspended its debit card tax refund program in response to a security breach at its contractor, JP Morgan Chase, Revenue Services Commissioner Kevin Sullivan announced Monday.
An attack on JP Morgan’s website between July and September affected customers all over the country. In Connecticut, the attack impacted residents who have prepaid debit cards that the state uses in lieu of checks to administer payments like tax refunds, child support, and unemployment benefits.
The attack potentially exposed the personal information of about 14,000 Connecticut card holders, including holders of about 7,000 cards issued by the Department of Revenue Services.
In response, Sullivan said Monday his department was suspending the debit card program for tax refunds and sending thousands of residents their refunds via paper checks for the rest of the year.
In 2014, the Revenue Services Department will give taxpayers the choice to receive their refunds either by paper checks, direct deposit, or a debit card, according to the statement. He said the state also was looking to reopen the debit card contract as soon as possible to seek new competitive bids from vendors.
Sullivan, who announced the debit card tax returns almost two years ago, defended the concept Monday.
“The use of debit cards for many state purposes, including tax refunds, still makes business sense and costs less. However, at DRS, we owe it to the public to seek a new contract that assures security and far greater responsiveness,” he said.