Direct Express Investigation

Although the Direct Express card is advertised as an easy, convenient, and secure way to get your federal benefits, the company has seen a growing number of fraud cases in the last couple of years.

The company has received plenty of scrutiny and many customers believe that the cards are not safe to use.

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Why Is Direct Express Being Investigated?

After a significant increase in fraud cases, Comerica bank who is the issuer of Direct Express cards, temporarily suspended its Cardless Benefit Access service in summer 2018.

Direct Express cardholders found out that fraudsters, who occasionally worked with insiders including call-center employees, were stealing their Direct Express card numbers to make fraudulent online purchases.

In some cases, they would call Direct Express to report lost or stolen cards or have PINs changed. This way they managed to get the payments routed to MoneyGram locations where they would pick up checks and cash them. 

Direct Express has been accused of being slow in reimbursing money and even suspending accounts that are pending an investigation. In some instances, they charged cardholders fees to issue and activate new cards after a fraud.

The US Senator Elizabeth Warren conducted an investigation into the Direct Express cardless service in 2018.

As a result of the investigation, Comerica informed that it would no longer allow customers to call and have their benefits sent without having their physical card.

It has also reimbursed everyone who lost their money. Warren requested the Treasury Department to enhance fraud protection in the Direct Express prepaid program once its contract is renewed in 2020.

In January 2019, retirees, veterans, and disabled in San Antonio sued Direct Express for debit card fraud because they regularly had their fraud claims denied. Comerica Bank and Direct Express operator Conduent business services have been accused of conducting false investigations into the fraud charges and subsequently rejecting loss claims. 

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What Does That Mean For The Cardholder?

Knowing that frauds with Direct Express occur frequently and that resolving fraudulent cases can take a long time, cardholders should use their Direct Express cards with care in order to prevent unauthorized withdrawals from their accounts. 

Can I Trust The Direct Express Company With My Money?

If you make sure to keep your Direct Express card safe and protect your personal information, you will minimize the chances of having your card compromised. Direct Express claims to have lower fraud levels than other prepaid debit card programs. There are several ways in which the company protects cardholders from fraud:

  • Direct Express uses chip card technology, which is the global standard in card protection. It prevents counterfeiting, making it more difficult for fraudsters to replicate cards. 
  • The Direct Express cardholders’ money is FDIC-insured up to the maximum legal limit.
  • The consumer protections required by Regulation E and MasterCard zero liability shields consumers from unauthorized card use. 
  • Direct Express is covered by the MasterCard SafetyNet service, a program that reduces the risk of cyber hacking.
  • The company assures fraud monitoring of all prepaid transactions.
  • Automated mobile alerts inform customers when a deposit has been made to their account and when the account balance is low, allowing them to quickly detect any suspicious activity.

What Can I Do To Minimize The Risk Of Direct Express Card Fraud?

  • Verify your account balance and recent transactions regularly. If you notice any unfamiliar charges to your bank account, call Direct Express customer service immediately to cancel the card. 
  • Whenever possible, use an ATM attached to a bank branch. They usually have better security than the ATMs outside grocery stores or gas stations. Make sure no one is watching while you are entering your PIN code.
  • Beware of phishing scams in the form of fraudulent emails claiming to be from banks or retailers.
  • Destroy your old Direct Express card immediately after you receive and activate a new one.
  • Protect your computer and mobile devices by installing firewalls, anti-virus, and anti-spyware software.
  • Use a secured network. Never make financial transactions online when using your mobile device or computer in a public place.
  • When making online purchases, always check that there is “https” and a padlock icon in the address bar, indicating that your data transfer is secure.
  • Report fraud immediately to limit its impact on your finances. If you are not quick to report the fraud, you can be held liable for some or all of it. 

Get more helpful advice on using your Direct Express card here.

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