Comerica Bank accused of screwing senior & disabled Direct Express debit card holders

Comerica Bank accused of screwing senior & disabled Direct Express debit card holders

By Lynda Carson - December 12, 2024

Comerica Bank which has recently been sued by the Consumer Financial Protection Bureau (CFPB) for screwing seniors and those with disabilities who use the Direct Express debit cards, has a branch bank located in Oakland, at 1200 Broadway St https://comerica.banklocationmaps.com/en/usa/california/oakland .

Reportedly, Curt Farmer (Chairman, President & CEO) https://www.fec.gov/data/receipts/individual-contributions/?contributor_name=Curt+Farmer , a resident of Dallas, Texas https://docquery.fec.gov/cgi-bin/fecimg/?202410249710244317 , and James J. Herzog (CFO) https://www.fec.gov/data/receipts/individual-contributions/?contributor_name=James+J.+Herzog , a resident of Southlake, Texas https://docquery.fec.gov/cgi-bin/fecimg/?202410249710244328 , are the key people in charge of Comerica. The same company accused of screwing seniors, and those with disabilities, who have been using Direct Express debit cards.

Just try to imagine residing in Oakland back in 2008, and being pressured by the Social Security Administration, or the Treasury Department to stop receiving your Social Security or SSI paper checks, or your VA checks, and being pressured to switch over to the Direct Express Debit - Master Card, to receiver you monthly federal benefits.

Meanwhile, back then the local check cashing stores were pressuring people with their own money making campaigns (schemes) to convince people to use their “debit cards” to receive your federal benefits, instead of using the Direct Deposit debit cards being pushed on people by the Treasury Department, and Social Security Administration. It was back in 2008 when the Treasury Department came up with the Direct Express debit card scheme with Comerica, and the check cashing industry came up with their own schemes that year to get a piece of the action.

Indeed, just try to imagine recently how it would feel to go to a bank’s ATM in Oakland to draw out some cash from a Direct Express debit card account, and see a statement on the ATM claiming that you already took out some money that day, even though you did not. That’s in addition that the bank would not tell you how much money you had in your account, and would not provide a paper statement (receipt), telling you how much money you have in your Direct Express debit card account at that moment. These are just a few of the experiences that people are having when using their Direct Express debit cards lately in Oakland.

It was back in 2008, when the federal government was trying to save money by getting people to switch over to Direct Express debit cards, instead of receiving the paper checks from the Treasury Department for their federal benefits.

The December 6, 2024, Consumer Financial Protection Bureau (CFPB) complaint filing against Comerica may be found here, https://files.consumerfinance.gov/f/documents/cfpb_CFPB-v.-Comerica-Bank__Complaint_2024_12.pdf .

Reportedly, recently on December 6, 2024, the Consumer Financial Protection Bureau (CFPB), sued the Comerica Bank headquartered in Texas, for systematically failing disabled and older Americans using Direct Express debit cards to receive their Social Security and SSI monthly benefits. Reportedly, problems with their Direct Express debit card accounts locally, and across the nation have been going on for a long time, and have been a great hardship for the elderly, and those with disabilities.

Reportedly, in 2018, in part an article about problems with Direct Express debit cards stated, “To the drain accounts of federal beneficiaries, scamsters have allegedly taken advantage of security flaws in the bank’s service that were part of a program named Direct Express, according to reports.

“Direct Express didn’t put up a red flag, even though they had all the information about the money being wired to Florida, when we live in Massachusetts, but they just sent the money,” caregiver Jackie Densmore said, according to reports. “We were thinking it was safe because it’s the U.S. Treasury.”

However, it was reported in 2019 that Senator Elizabeth Warren sought better fraud protection for government prepaid programs including the Direct Express debit cards. Reportedly, in part it states, “Sen. Elizabeth Warren, D-Mass., has asked the Treasury Department to boost fraud protection in the Direct Express prepaid program after hundreds of federal benefits recipients were victims of fraud.

Direct Express, which allows Americans without bank accounts to access their federal benefit payments via prepaid debit cards, is currently administered by Texas-based Comerica Bank. The program’s contract is scheduled to be rebid in 2020.

“The fraud detection and reimbursement process in the Direct Express program needs to be examined with close scrutiny,” Warren wrote in the letter to Treasury Secretary Steven Mnuchin, which was obtained by American Banker.”

Additionally, as long ago as 2019, reportedly “A new San Antonio federal lawsuit alleged that Direct Express debit card users were fraud victims whose claims were routinely denied by Comerica.”

According to the report https://www.expressnews.com/business/local/article/Retirees-veterans-sue-over-Direct-Express-debit-14420254.php , “A San Antonio federal lawsuit alleges thousands of retirees, veterans and disabled people who receive federal benefits through Direct Express prepaid debit cards were fraud victims whose claims were routinely denied.

Comerica Bank, which issues the cards, and Direct Express operator Conduent Business Services conducted “sham investigations” into the fraud charges before rejecting loss claims, the suit further alleges.

Comerica and Conduent, the suit adds, left Direct Express Debit MasterCard users “holding the bag on hundreds, thousands, and even tens of thousands of dollars of fraudulent charges by unauthorized persons.”

And in 2020, a class action lawsuit was filed against Conduent Business Services, LLC, Direct Express, Comerica Inc., and Comercia Bank https://www.directexpressclassaction.com/home/8761/DocumentHandler?docPath=/Documents/Amended_Complaint_DE_31.pdf , allegedly for running a scam on people using Direct Express debit cards.

An article in The War Horse in June of 2021 https://thewarhorse.org/treasury-renews-va-banking-service-amid-fraud-allegations/ , details how Veterans were being ripped off by the Direct Express debit card experience, and Comerica. Reportedly, in part it stated, “It’s unclear how many veterans were affected by the scheme. After Sen. Elizabeth Warren began investigating in 2018, then-VA Secretary Robert Wilkie told her the agency didn’t know about the problem until her office contacted VA. After consulting with the Treasury Department, VA learned that out of a total 480 Direct Express account holders who had benefits stolen, 30 were veterans. The thieves made off with more than $460,000.

But not only does the government still use the program, the thieves also appear to be continuing to abuse it. The Consumer Financial Protection Bureau’s complaint database lists nearly 2,000 grievances against Comerica—the number four issuer of prepaid cards—since January 2017 among users who said they had a credit or prepaid card. Among those, more than 100 listed themselves as service members.”

Additionally, before the CFPB lawsuit against Comerica, during 2023 it was reported in Oregon that “Seniors, veterans and people with disabilities complain Direct Express is denying refunds to social security benefit cardholders despite obvious signs of fraud.” Click here for more, https://www.kgw.com/article/news/investigations/oregon-man-unauthorized-charges-social-security-benefits-fraud-claim-denied/283-d3e80f00-f262-485e-b464-03f1c80b1e17 .

Some more of the many complaints made by people regarding the Direct Express debit card and Comerica Bank may be found here https://www.consumeraffairs.com/credit_cards/direct-express.html . Or here, https://www.reddit.com/r/SocialSecurity/comments/1151e22/directexpress_has_screwed_me/ .

So why did the CFPB take so long to take action against Comerica?

According to the December 6, 2024, Consumer Financial Protection Bureau (CFPB) court filing, in part it states, “Many Direct Express cardholders are beneficiaries of federal programs for retirees and individuals unable to work due to disability and thus have little income. Indeed, government benefits are some cardholders’ sole source of income. Losing access to these benefits, even temporarily, can leave cardholders unable to pay for housing, utilities, food, and other necessities. The same is true when cardholders’ funds are stolen through unauthorized transfers.”

“For example, one cardholder attempted to contact Comerica because she had ordered a replacement card but never received it. The cardholder, who has a hearing and speech impediment, had a personal representative assist her. They each called Comerica for assistance at least three times a week for three months, at times waiting almost an hour to speak with a customer service representative. The cardholder eventually had to open a bank account to get access to her funds because she had not received her replacement card; in the meantime, she could not pay her rent or utilities, had her electricity turned off and incurred a turn-on fee, and had to take out an $800 loan from her personal representative.

Another cardholder received a letter from Direct Express informing her that a different Vendor would be managing her account and that she would be receiving a new card in the mail the following month. After not receiving a new card she called Vendor 1’s phone line every day for a month, and then every other day for the next two months, because Heavy Queue repeatedly dropped her calls. She had no access to her benefits for three months and had to send a letter to her landlord explaining why she was late on rent.”

Reportedly, there may be 3.4 million people receiving Social Security and SSI benefits through their Direct Express - Debit MasterCard, in addition to people receiving benefits from the Coast Guard, the VA, and other institutions.

Some more news reports about Comerica Bank, and the Direct Express debit card may be found here, https://news.google.com/search?q=Comerica%20Bank%2C%20Direct%20Express%20debit%20card&hl=en-US&gl=US&ceid=US%3Aen .

A Press Release From The CFPB:

According to a December 6, 2024, press release from the CFPB, in part it states, “Today the Consumer Financial Protection Bureau (CFPB) sued Comerica Bank for systematically failing its 3.4 million Direct Express cardholders - primarily unbanked Americans receiving federal benefits. The bank deliberately disconnected 24 million customer service calls, impeding cardholders from exercising their rights under the law, charged illegal ATM fees to over 1 million cardholders, and mishandled fraud complaints while providing federal benefits through the Direct Express prepaid debit card program. The CFPB is asking the court to order Comerica to halt these practices, provide refunds to affected customers, and pay civil penalties that would go to the CFPB's victim relief fund.”

“The CFPB is suing Comerica Bank for illegally harming disabled and older Americans who count on Social Security and other federal benefits,” said CFPB Director Rohit Chopra. “By deliberately disconnecting millions of calls and harvesting illegal junk fees, Comerica boosted its bottom line at the expense of Americans living on a fixed income.”

Specifically, the CFPB alleges that Comerica harmed its customers by:

▪ Deliberately disconnecting customer service calls: Comerica’s vendors intentionally dropped more than 24 million calls from customers before they could reach a representative. Customers whose calls were not dropped were routinely forced to endure excessively long wait times—often in excess of several hours—to speak with a representative to get help with unauthorized transactions, charge disputes, and lost or stolen cards.

▪ Charging consumers illegal ATM fees: Over one million Direct Express cardholders were charged ATM fees to access their government benefits in situations where they were legally entitled to free withdrawals.

▪ Misleading fraud victims: When consumers contacted Comerica alleging they had been fraudulently enrolled into the Direct Express program, the bank’s vendors frequently advised the consumers that “no error occurred” where the bank had determined that there was, in fact, enrollment fraud.

▪ Imposing illegal terms of service on consumers seeking to stop payments: Comerica led its consumers to agree to waive their consumer protections by requiring cardholders to contact and request merchants to stop pre-authorized payment transfers from their account in situations where the law in fact required the bank to stop the transfers itself.

▪ Failing to investigate account problems: Under federal law, when a customer notifies a bank about an incorrect or potentially fraudulent charge on their account, the bank must take steps to investigate the error within a specified time period. The CFPB’s investigation found that Comerica failed to meet this requirement more than 20,000 times. And when they did investigate, they frequently provided vague and confusing findings or blew off customers altogether.

▪ Forcing consumers to close accounts, which often resulted in additional fees: The bank’s vendors required thousands of cardholders to close their accounts to stop a preauthorized payment, resulting in consumers incurring additional fees to expedite receipt of their new debit cards to regain access to their government benefits.


The Bank of New York Mellon Corporation Selected As The New Financial Agent For The Direct Express Prepaid Debit Card Program:


As a result of the problems seniors and those with disabilities are having with the Direct Express debit cards, and the alleged problems with Comerica Bank, reportedly on Nov. 21, 2024, in part the press release states, “The Bank of New York Mellon Corporation ("BNY") (NYSE: BK), a global financial services company, has been selected by the U.S. Department of the Treasury's Bureau of the Fiscal Service ("Fiscal Service") as the financial agent for the Direct Express® prepaid debit card program. The 5-year agreement begins on January 3, 2025.”

That’s right! Despite all of the problems people are having with the Direct Express debit card program, and the problems with Comerica running it, Comerica has recently gotten another 5-year contract to run the program, and the 5-year agreement begins on January 3, 2025. It appears that the bank officials at Comerica may have some close politician friends in high places.

According to Open Secrets, Comerica Inc., made many political campaign contributions in 2024 https://www.opensecrets.org/orgs/comerica-inc/summary?id=D000025046 . Reportedly through the years, the lions share of Comerica’s campaign contributions went to the fascist Republicans https://www.opensecrets.org/orgs/comerica-inc/totals?id=D000025046 .

According to Wikipedia https://en.wikipedia.org/wiki/Comerica , in part it states, “Comerica Incorporated is an American financial services company, headquartered in Dallas, Texas. It is the parent of Comerica Bank, a regional commercial bank with 413 branches in the U.S. states of Texas, Michigan, California, Florida and Arizona. Comerica is among the largest U.S. financial holding companies, with offices in a number of U.S. cities.”

Lynda Carson may be reached at newzland2 [at] gmail.com

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