“Victims maintain that Direct Express never contacted them about the fraud, there were hundreds of complaints on the Consumer Financial Protection Bureau’s Complaint Database and the Better Business Bureau’s website alleging unprofessional customer service and difficulties in the fraud reporting and reimbursement process.” “But claims from my constituents and victims continue to raise questions,” she wrote. 10 letter to Treasury Secretary Steven Mnuchin. In the first year after the service was introduced in August 2017, Comerica reported to Warren that there were 480 cases of fraud amounting to about $460,000, or almost an average of $1,000.Ĭomerica maintains that all cardholders were reimbursed, Warren said in Jan. senator from Massachusetts, conducted an investigation into Direct Express and the cardless service.Ī breakdown of key state and local races and candidates in the May 24 primary runoff. Conduent is part of Conduent Inc., a publicly traded conglomerate based in New Jersey.ĭemocratic presidential candidate Elizabeth Warren, the U.S. The bank said a Conduent employee working at a call center was fired as a result of the fraud, American Banker added. Fraudsters exploited security flaws in Comerica’s Cardless Benefit Access Service to drain accounts, American Banker reported. Last summer, Comerica temporarily suspended a component of its prepaid card program after a flurry of fraud cases. The Direct Express program has received plenty of scrutiny over the last year. And then you go through that process and the answer at the end is, ‘Pound sand, we’re not going to give you the money back.’ They don’t honor their obligations.” “You have money stolen from you and then the people who are supposed to look out for you give you a process to go through. Adam Webb, an Atlanta lawyer representing the plaintiffs. Carnley a provisional credit or do anything to stop the fraudulent transactions from draining his benefits account,” the suit says.Ĭomerica and Conduent also failed to limit Carnley’s losses to either $50 or $500 as required under the card’s “terms of use,” the complaint adds. But Carnley could not have made that money order request because he was in Pensacola, Fla., on his way to Houston to start cancer treatment, the suit says. 8, a duplicate money order was purchased for $466.88 using Carnley’s card information from the Alabama Walmart. Within seconds, the suit says, a $182.50 withdrawal was made on his card account from an Arizona Walmart.įive days later, on Jan. Jon Carnley used his card to buy a money order for $464.88 on Jan. The lawsuit recounts each plaintiff’s experience with unauthorized withdrawals from their Direct Express account.
While the cards are touted as safe, the suit says, in reality they are “unsafe, having negligible security protections or fraud alert capabilities, and Defendants’ systems are rife with fraudulent transactions.” The next Direct Express agent is expected to be announced soon, American Banker reported last month.Ĭonduent handles Direct Express customer complaints and has “substantial operations” in San Antonio where it employs hundreds, the suit says. The contract was renewed in 2014 and is up for renewal again.
More than 4.5 million people have their federal payments - including Social Security and veteran disability benefits - automatically deposited into their Direct Express card account each month.Ĭomerica first contracted with the Treasury Department to administer the Direct Express program in 2008. A judge last month ruled only Georgia customers can proceed with the suit there, though. A Conduent spokesman didn’t have an immediate comment on the suit, filed Thursday.įive of the eight plaintiffs originally sued in February in Atlanta federal court. 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.”ĭallas-based Comerica doesn’t comment on pending litigation, spokeswoman Carmen Branch said in an email.
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