Direct Express Card

Direct Express Investigation (Fraud and Class Action Lawsuits)

If you are not satisfied with Direct Express Customer Service or Dispute resolution department and want to know if this is a common problem and whether there are Direct Express investigation or class action lawsuits out there, we can help.

To begin, we will review Direct Express investigation by federal authorities, including the Treasury Department Watchdog and United States Senator Elizabeth Warren.

Also, we will highlight TV News Investigations into Direct Express fraud experienced by cardholders.

Next, we will walk you through lawsuits (including class action) against Direct Express that we are aware of.

Additionally, if you currently have a dispute you want to file with Direct Express, here is what we will do to help you:

First, it is important that you know how the dispute resolution process works. We will provide a step by step explanation.

That way, you can follow the proper process that will increase your chances of getting the amount you are missing credited to your account.

In our experience, the number one reasons disputes with Direct Express are unsuccessful is a lack of understanding of the dispute process and the timelines for submitting the dispute forms and evidence.

Therefore, before in addition to providing you details on how the Direct Express dispute resolution department works, we will also explain in detail the dispute timeline.

This post will cover:

  • Direct Express Investigations
  • Direct Express Lawsuits
  • The top Reasons for Direct Express Disputes
  • Direct Express Dispute Resolution Department Process
  • The Direct Express Dispute Timeline

Federal Government Direct Express Investigation

Here are federal investigations of Direct Express for handling of customer fraud disputes we are aware of:

Government did not know Money was being stolen from Direct Express Accounts

Inspector General of the U.S. Treasury says it was in the dark about half a million dollars stolen from retiree and disability accounts through Direct Express.

This 2019 news report alleges that the government watchdog agency that oversees Direct Express was not aware of the widespread fraud.

The reason is that the company contracted to administer the Direct Express program failed to report it.

Read the news report here.

U.S Senator Elizabeth Warren’s Investigation Uncovers New Evidence Direct Express Left Retirees, Veterans Vulnerable to Fraud

United States Senator Elizabeth Warren (D-Mass.) sent a letter to then Treasury Secretary Steven Mnuchin and Bureau of the Fiscal Service Commissioner Kimberly McCoy about her Direct Express Investigation.

In the letter, she shared the results of an investigation of fraud affecting Social Security and VA beneficiaries using the Comerica-administered Direct Express program.

Since 2008, Comerica has administered the Direct Express program, which serves 4.5 million Americans.

The Direct Express program was designed to assist elderly and disabled Americans and veterans by providing prepaid debit cards and electronic payments of federal Social Security disability and veterans benefits.

Federal benefits are the primary source of income for many of these Americans to keep a roof over their heads, pay for life-saving medications, and put food on the table.

Results of Senator Warren’s Investigation

Senator Warren’s investigation revealed that:

Hundreds of individuals were affected by fraud in the Direct Express program.

For example, the cashless benefit program resulted in 480 cases of fraud.

The total amount of confirmed fraud is almost $460,000, an average of nearly $1,000 stolen per affected individual as a result of the cashless benefit program.

Furthermore, the Social Security Administration, VA officials, and the public were not informed of fraud affecting their program beneficiaries by Comerica. I

In fact, officials at the Social Security Administration and the VA learned of the fraud only after public reports brought it to their attention.

Furthermore, Comerica had insufficient procedures to prevent criminals from impersonating beneficiaries and stealing their benefits.

As a result, criminals were able to obtain personally identifiable information about beneficiaries from other sources and use that to commit fraud through Comerica’s Cardless Benefit Access program.

Comerica’s antifraud system was not robust enough to prevent this fraud.

Read the full report here.

TV News Direct Express Investigation

Here are investigations of Direct Express by TV news stations we are aware of:

Fraudsters Target Federally Issued Direct Express Debit Cards

The first story is from Sacramento CBS13 in California.

It highlights the story of Yasmin Snider of Citrus Heights, a Direct Express cardholder.

Yasmin, who is battling stage 4 breast cancer, 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 government benefits through her government-issued Direct Express Prepaid MasterCard.

When Snider went to use her Direct Express MasterCard one day, she realized her entire $618 payment was taken.

She called the number on the back of her Direct Express card for Direct Express customer service.

Snider learned somebody withdrew her entire monthly Social Security Payment from an ATM in Florida.

The problem was that Snider does not know anybody in Florida and has never been to Florida.

As a result of losing her money on her Direct Express card, 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.

To read the entire story from Sacramento CBS13, click here. You can also watch it below.

Phishing scam hits Direct Express debit cards for Social Security

The next story is from WISHTV8 in Indianapolis, Indiana about Phishing scams targeting Direct Express customers.

They highlight the story of Charity Golden, who receives Social Security supplemental income (SSI) payments every month.

When Golden was first approved for supplemental income payments, she didn’t have a bank account.

Therefore, she signed up for a Direct Express debit card on the Social Security Administration’s website.

However, sometime in 2020, her Direct Express debit card number had been compromised and someone drained her account.

It turns out she is the victim of a phishing scam.

In total, she lost $900.

She got online and started tracking the fraudulent transactions, gathered up all the information and sent it to Direct Express, the company put a hold on her account while she waited for a new card.

However, she never got her new card from Direct Express, neither did she get the investigation paperwork to file a dispute.

Direct Express said they would not cover her losses.

You can read the report here or watch it below.

Here is another news story by 7 News Boston.

Direct Express Lawsuit

Here is the list of lawsuits we are aware of against Direct Express:

Retirees and veterans sue over Direct Express debit card fraud

The first lawsuit was in San Antonio, TX, where Direct Express’ parent company, Comerica Bank is based.

Here’s what the San Antonio federal lawsuit alleges:

It claims that 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.

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

Additionally, 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.”

If you review Direct Express customer service complaints, you will see similar claims being made by cardholders.

An Example of Fraud Dispute Alleged in the Lawsuit

The lawsuit recounts each plaintiff’s experience with unauthorized withdrawals from their Direct Express account.

Jon Carnley used his card to buy a money order for $464.88 on Jan. 3 from an Alabama Walmart.

Within seconds, the suit says, a $182.50 withdrawal was made on his card account from an Arizona Walmart.

Five days later, on Jan. 8, a duplicate money order was purchased for $466.88 using Carnley’s card information from the Alabama Walmart.

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.

However, Comerica and Direct Express refused to provide Mr. Carnley a provisional credit or do anything to stop the fraudulent transactions from draining his benefits account, the suit alleges.

Additionally, Comerica 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.

To read more about this lawsuit, click here.

The Top 3 Reasons for Direct Express Disputes

There are many reasons why Direct Express cardholders file disputes with customer service. Here are the top three:

Fraudulent Transactions

First, the biggest reason cardholders file disputes with the Direct Express dispute resolution department is because of fraud.

Here’s how it typically plays out:

Cardholders will discover a transaction or a series of transactions on their account that they did not make.

Generally, this issue is discovered when the cardholder tries to use their Direct Express debit card and their card is rejected.

Since the cardholder believes they have enough money in the account to cover the transaction, they check their card balance.

That’s when they find out that their balance is lower than it should be.

Stolen Direct Express Card

Second, and related to the first issue above is the issue of stolen Direct Express cards.

This is one of the top issues why people file disputes with the Direct Express dispute resolution department.

Some cardholders have had their Direct Express debit card stolen, and their Social Security, SSDI, or SSI benefits drained from their account.

Once they discover their card stolen, they have to go through the process of reaching Direct Express to have the card deactivated.

Next, they have to file a dispute with the dispute resolution department to try and get the money that was stolen restored to their card.

Money Not Given by ATM but Taken from Card

Fourth, one of the most common reasons cardholders files a dispute has to do with ATMs not delivering cash, even though the amount is deducted from the card account.

Here’s how that work:

Typically, a Direct Express cardholder will go to an ATM to use their card to get cash. They will enter the amount of cash they want to get out of the ATM. The ATM will return a receipt saying that the transaction cannot be completed.

They will then try again for a different amount, typically a lower amount. The ATM will return the cash for the lower amount.

However, the new balance on the account will show that the first transaction, which did not go through has also been deducted from the account.

This is a great source of frustration because the cardholder has now lost money they did not receive from the ATM.

In addition, proving that they did not receive the money, even though the ATM shows they did, can be a challenge.

Direct Express Dispute Resolution Department Process

Follow the next three steps in order to have the best chance of resolving your dispute with Direct Express.

How to file a Direct Express Dispute

If you have experienced one of the issues listed above, or you have an issue we did not talk about but would like to file a dispute, here’s how:

Step 1 – Call Direct Express Customer Service

Direct Express does not have a dispute form online, so the first step in the dispute process is to call Direct Express customer service.

You should call customer service as soon as you find out about the issue with your card.

You will probably have to wait on hold for a while before reaching a human.

For the fasted way to speak to a live person at Direct Express, scroll down below.

Customer Service can be reached 24 hours a day, 7 days a week.

The phone number Direct Express Customer Service is listed on the back of your card.

You can also call 888-741-1115 to reach customer service.

For the Hearing-impaired, call 1-866-569-0447.

For international callers, dial 1-765-778-6290 – (Collect).

You can call Direct Express customer service at the number below:

Step 2 – Provide Details of Your Issue

Once you are able to connect with a live person, report the issue you are trying to dispute.

If you are disputing unauthorized or fraudulent charges, prepare the following information to speed up the process:

  • Your Direct Express card number
  • Your full name
  • Date of birth
  • Your Social Security number
  • The transaction you want to dispute (date of the transaction, the amount spent, the vendor’s name and location)
  • The reason why you think the transaction is fraudulent or why it was not possible for you to have made that transaction.

Step 3 – Wait for the Dispute form in the Mail

When you report a dispute with Direct Express customer service, they will send you a dispute form, which you have to complete.

You have 10 business days from the date of your call to fill out the form and return it.

Therefore, it is important to be on the lookout for the form in the mail and complete it and mail it back as soon as you get it.

Step 4 – File a Report with the Police

If you’ve been:

  • A victim of fraud
  • Your card was used for an unauthorized transaction (maybe in another state)
  • Your card was lost/stolen, and your money was drained from the Direct Express account

File a report with your local police as soon as you become aware of the issue.

Here’s why that is very important in the dispute resolution process.

As we have explained in Step 5 below, the burden falls on you to prove that you did not make the transaction you are disputing.

Having a police report of the incident helps you show how serious you took the issue.

Second, having a police report helps show your whereabouts when the issue occurred, especially if the charges were made in another state.

Finally, having a police report proves that you are willing to go on record to prove that this transaction was unauthorized.

With a police report, you are likely to get a favorable result when you submit your dispute form in Step 5 below.

Step 5 – Complete Dispute Form

When you receive the dispute form, complete it in its entirety and provide any supporting documentation that was requested.

Why it is important to take this step seriously:

Completing and returning the dispute form is the most important step in the Direct Express dispute resolution process.

Here’s why you should take it very seriously:

First, if you are trying to get a credit back for unauthorized or fraudulent transactions, here’s what you have to know:

You have to prove that you did not make that transaction you are disputing.

As a result, the burden is on you to show that you could not have made that purchase.

Second, unless the evidence is irrefutable, Direct Express has no way of knowing that you did not make that transaction.

Therefore, you should provide them as much evidence as possible to help you with your case.

For example, if the purchase was made in another state and there is no way you could have been in that state, show evidence why.

Also, if the purchase was made at a merchant you do not shop at or could not have shopped at, provide evidence.

Typically, you will be given 10 business days to submit the dispute form the date of your call.

Step 6 – Direct Express Dispute Resolution Department will Investigate

Next, the Direct Express Dispute Resolution Department will investigate your claim.

They will determine whether your claim is valid or not.

This will happen within 10 business days after you submit your form.

During this time, there will be no credit to your account.

If they find that your dispute is valid, they will make corrections promptly, including crediting your account with the missing funds.

Step 7 – Dispute Resolution Decision

After the 10 business days have expired, you will receive a decision from the Direct Express Dispute Resolution Department about your claim.

If they find that your dispute is valid, they will make corrections promptly, including crediting your account with the missing funds.

You will get a letter in the mail informing you of the credit applied to your account.

However, if they find that your claim is not valid, they will send you a letter explaining their reason for their decision.

However, sometimes, they may need more time beyond the 10 business days to continue with their investigation.

If they need more time, they will apply a temporary credit to your account as explained below.

When a Temporary Credit is Applied

Sometimes, Direct Express may need more time to complete their investigation, up to 90 days.

If that’s the case, they will credit your card within 10 business days for the amount you think is in error.

This means that you will have the money during the time it takes for them to complete their investigation.

As soon as the investigation is completed, they will let you know the results within three business days.

If they found that there was indeed an error, they will send you a written explanation.

Also, you then get to keep the temporary credit that was applied to your account.

However, if after their investigation, they find that your claim was not valid, then here’s what will happen:

You will get a letter in the mail with details of their decision.

Also, any provisional credit applied to your account will be taken back from your account.

Direct Express Dispute Timeline

One of the biggest issues cardholders face is not paying attention to dispute timelines when filing their dispute.

This can lead to frustration, including missing the window when you need to file your claim to be eligible for a credit.

If there is a transaction on your account that you did not make or is in error, you have 90 days to report an error to Direct Express.

In fact, according to Direct Express, you have to report the issue to them as soon as you find out about any unauthorized transaction on your account.

Furthermore, if you are asked by customer service to submit your dispute in writing via the dispute form, do it quickly.

As mentioned above, you have 10 business days to submit the form from the date of your call.

Once they receive your dispute form, Direct Express will get back to you within 10 business days to complete their investigation.

It is important to note that during this initial 10 business day period, there will be no credit to your account.

When they contact you within 10 business days, they will provide you with one of the following:

  1. They found that your dispute is valid, and will make corrections promptly.
  2. They may need more time to complete their investigation, up to 90 days.

Should they need more time to look into your dispute, they will credit your card with the missing amount.

You should see that credit on your card within 10 business days for the amount you think is in error.

Note that if after their investigation, they find that your claim was not valid, any provisional amount credited to you will be taken back from your account.

Direct Express Investigation Summary

Here’s the bottom line:

The fact that the watchdog did not know about fraud at Direct Express is concerning.

Senator Warren’s investigation confirms many of the complaints Direct Express cardholders have made.

Additionally, TV News investigations we highlighted shows Direct Express fraud is a growing problem.

However, if you follow Direct Express’ dispute process, you have a high chance to get your money back. Here’s how:

Direct express cardholders usually file a dispute for these three top reasons:

  • Fraudulent Transactions
  • Stolen Direct Express Card
  • Money Not Given by ATM but Taken from Card

We advise that you should call Direct Express customer service immediately you have an issue with your account, including fraud.

Second, it’s a great idea to file a police report if you have unauthorized transactions on your account.

Direct Express will require you to fill out a dispute form.

Complete the form immediately upon receipt. You have 10 business days from the time of your call to send in the form.

It takes Direct Express 10 business days to investigate your claim.

If it will take them more than 10 business days, they will issue you a provisional credit.

Questions?

We hope this post on the Direct Express Investigation was helpful.

If you have further questions about Direct Express or Disability benefits, please let us know in the comments section below.

Be sure to check out our other articles on Social Security and Direct Express, including:
Direct Express Pending Deposit Explained
Second Stimulus Check for $600 Update
5 Reasons You Haven’t Received 2nd Stimulus Check
Direct Express Stimulus Check
Replacement Social Security card online

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