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Call Kurtis Investigates: Fraudsters Target Federally Issued Direct Express Debit Cards

SACRAMENTO (CBS13)– Battling stage 4 breast cancer, Yasmin Snider of Citrus Heights relies heavily on her monthly Social Security payment of $618 to rent a room, buy food and her medicine.  She, like 4.5 million Americans collects her benefits through her government-issued Direct Express Prepaid MasterCard.

When the United States Department of Treasury decided it would stop issuing paper checks by 2013, it forced 13 million Americans who collect federal benefits, including Social Security and Disability to choose between direct deposit or a government prepaid debit card called the Direct Express MasterCard. For people like Snider who don't have bank accounts, the debit card is their only option.  427,647 Californian's collect their benefits this way.  53,000 are in Sacramento.


Our investigation uncovered horror stories of Direct Express cardholders targeted by fraud and left with no money as they battled to get it back.

When Snider went to use her Direct Express MasterCard in the spring, she learned her entire $618 payment was taken.  She called the number on the back of her Direct Express card for Comerica bank which holds the exclusive contract to operate the Direct Express MasterCard.  Snider learned somebody withdrew her entire monthly Social Security Payment from an ATM in Florida.

"I said, 'Florida. I don't know anybody in Florida.  I've never been to Florida,'" she recalls.

She did not have a penny to her name and was almost out of medicine.  She had no money for food and was forced to rely on friends to feed her.  She says the Comerica bank rep told her it could take up to 90-days to investigate the fraud.  In the meantime, she had no money.

"I don't know what to do next; how long this is going to take. Whether I'm going to have a place to go," said Snider.

We've uncovered 400+ complaints nationwide tied to Direct Express fraud.

A victim in Rhode Island says, "Direct Express will not give me my provisional money… I am out my monthly check and am being evicted out of my residence."

A victim in Washington said without the $1,000 taken from their Direct Express Account, "I will lose my house and car!"

A victim from New York was out $500 saying, "I barely had any money to pay bills…supervisor claimed that I can contact the Fraud Department XXXXX and ask for a temporary 'hardship needs fund.'" After getting transferred, the victim claims the Fraud Department said, "Such a courtesy does not exist."

Navy Veteran Robert Grimes of Sacramento says it took Comerica five months to investigate $109 fraudulently taken from the Direct Express Card he uses to collect his Veterans Benefits.  Seven months after the investigation concluded and more than a year after he initially reported the fraud, he still wasn't repaid.

"I've called about 3-hundred times. I just want them to give my money.  That's all," said Grimes.

A video promoting the Direct Express MasterCard calls it a safe, easy and convenient way to get your federal benefits. "There is no risk of lost or stolen benefit checks."

Author and Private Investigator JB Simms says, "They're a bunch of damn liars."  He says he's twice battled Comerica to get his money back after fraud and says he now spends time helping Direct Express fraud victims navigate the system to get their money back.

"They have no other means of income. You've got a cancer patient, you have military patients with PTSD.  They've already fought.  They're tired of fighting," he said.


Federal banking rules protect all Americans from Credit and Debit card fraud.  When it comes to debit cards, the regulation states that once you report fraud, the bank has 10-days to investigate. If the financial institution needs more time to investigate and the consumer has already submitted the paperwork requested by the institution, they're supposed to get a provisional credit.

When every penny counts, these benefit recipients can't wait ten days, and we've heard of some waiting much longer to get repaid than what the law requires.


We had a series of initial questions for the program.

  • How many Direct Express Users are Victims of Fraud?
  • How many victims received provisional credits?
  • How long are people waiting to get their money reimbursed?
  • Who's monitoring the Direct Express program?

The Department of Treasury, Social Security and the Bureau of Fiscal Services said they could not answer our questions.  Fiscal Services directed us to Comerica Bank for answers.

The bank's Senior Vice President Nora Arpin claims the bank follows federal regulations and says Comerica's fraud rate is among the lowest in the industry, without sharing statistics.

"Specific fraud data is not released to the public by any company in the card space due to the verified likelihood of increased criminal activity if this type of information were to be shared," Arpin wrote. "The card networks do not release this type of information publicly and strongly discourage their Issuers from releasing this type of information publicly as a security measure."

Simms thinks the fraud might somehow be tied to the fact Comerica uses an outside company to handle Direct Express customer service calls.

"I think there's a fox in the hen house," said Simms. "And I think the FBI needs to get involved because there will be some heads rolling."

READ: Office of Inspector General's Report to Congress: Direct Express Bid Evaluation Documentation Requires Improvement


Comerica did shut down part of the Direct Express program in August after fraudsters learned they can manipulate the Cardless Benefit Access Service to collect someone's money, without physically holding the victim's card.

"An estimated 500 (or 0.01111%) of cardholders were affected by fraud in the CBA program," Arpin said. "This has now been stopped, and cardholders have been made whole."

Comerica's Arpin admitted to us its processes are not perfect.

"Direct Express is a secure program with strong fraud protections," she said.  "For the past 9 years, the program has had a 94% cardholder satisfaction score on an independent survey."

Snider and Grimes say they were not satisfied customers and didn't get their money back until CBS13 got involved.

READ: Office of Inspector General's Report to Congress: Fiscal Service Needs to Improve Program Management of Direct Express


After pressure, The Bureau of Fiscal Services is auditing the Direct Express program which should be released by summer of 2019.  Democratic Senator Elizabeth Warren of Massachusetts fired off a lengthy letter to the head of Comerica Bank last month demanding similar answers to questions we asked saying, "Interruption in accessing these basic living expenses could have devastating consequences for those receiving federal benefits."



Simms worries for anyone who chooses to collect their benefits through Direct Express.

"It's Russian roulette," Simms said.  "It's Russian roulette for the people who have a Direct Express card because eventually it's going to happen to you. You are going to have to fight to get your money back."


Call Kurtis: How many fraudulent charges were reported to Comerica by Direct Express cardholders for calendar years 2016, and 2017?

Answer:  Comerica regularly validates that its fraud rate for the Direct Express program is among the lowest in the industry.  We use third-party sources for this validation; however, specific fraud data is not released to the public by any company in the card space due to the verified likelihood of increased criminal activity if this type of information were to be shared.  The card networks do not release this type of information publicly and strongly discourage their Issuers from releasing this type of information publicly as a security measure.

Call Kurtis: What is Comerica's policy regarding provisional credits, during a fraud investigation?

Answer: The Direct Express program follows Regulation E with the exception that we give cardholders a longer period of time to report an unauthorized transaction (90 days vs. the 60 days in the Regulation).  Regulation E states the conditions in which provisional credit is given. The Direct Express program adheres to the terms of Regulation E. The specific language from the Regulation may be found below:

Time limits and extent of investigation-(1) Ten-day period. A financial institution shall investigate promptly and, except as otherwise provided in this paragraph (c), shall determine whether an error occurred within 10 business days of receiving a notice of error. The institution shall report the results to the consumer within three business days after completing its investigation. The institution shall correct the error within one business day after determining that an error occurred.

(2) Forty-five day period. If the financial institution is unable to complete its investigation within 10 business days, the institution may take up to 45 days from receipt of a notice of error to investigate and determine whether an error occurred, provided the institution does the following:(i) Provisionally credits the consumer's account in the amount of the alleged error (including interest where applicable) within 10 business days of receiving the error notice. If the financial institution has a reasonable basis for believing that an unauthorized electronic fund transfer has occurred and the institution has satisfied the requirements of § 1005.6(a), the institution may withhold a maximum of $50 from the amount credited. An institution need not provisionally credit the consumer's account if:(A) The institution requires but does not receive written confirmation within 10 business days of oral notice of error;

Call Kurtis:  Once fraud is reported, how often are people receiving an immediate provisional credit? How long does an average fraud investigation take to complete? 

Answer: While it may seem like we should be able to obtain enough information from the cardholder over the phone to complete the investigation right away, that usually isn't the case.  The Direct Express program, like most (if not all), Financial Institutions request paperwork to assist with the investigation. That paperwork plays a critical role in assisting the investigation which is why it is requested.  If the paperwork is received by the 10th business day, provisional credit is given which is in compliance with Regulation E.  The exception to the request for paperwork is when it is very clear that there has been 3rd party fraud (i.e., the fraud team identifies a transaction as potentially fraudulent before the cardholder calls in to dispute the transaction, etc.).  In those cases, we fast-track the resolution and the cardholder receives credit to his/her card in 10 days or sooner.  Each and every investigation is unique-there is no average time to complete an investigation as the facts in each case dictate the time to completion.

Direct Express is a secure program with strong fraud protections which provides high-quality service to millions of cardholders every day. For the past 9 years, the program has had a 94% cardholder satisfaction score on an independent survey.


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