Direct Express is a prepaid card offered by Comerica Bank in partnership with the federal government to provide federal benefits, like Social Security payments, to a prepaid Mastercard. Late this Summer, hundreds of Direct Express cardholders had their federal benefits payments stolen by fraudsters.
This week, Sen. Elizabeth Warren demanded further answers from Comerica.
As reported by American Banker,
Warren’s letter to the Comerica CEO asked how many cases of fraud associated with the Direct Express program are known by the bank, as well as the total amount of individuals affected and the “total value” of the fraud. Warren is also asking for more details about the bank’s investigation into the fraud, and if Comerica is looking into whether other parts of Direct Express, besides the Cardless Benefit Access Service, have been affected.
Comerica in August suspended a component of the program, the Cardless Benefit Access Service, as more fraud cases were revealed. Criminals allegedly stole Direct Express card numbers, addresses and three-digit card identifiers, enabling them to make fraudulent online purchases. In some cases, criminals also called Direct Express to report cards as lost or stolen, or to have PIN numbers changed, and had payments routed to MoneyGram locations.
According to Comerica, the fraudulent activity resulted from security issues with its Cardless Benefit Access Service, a way for cardholders to access cash without their Direct Express card.
While federal benefit recipients can receive their benefits payments directly to any prepaid debit cards, the Direct Express card is the only one offered in partnership with the U.S. government. It was the only prepaid card impacted by the thefts.