Treasury Dept. Ignores Fraud Charges and Awards Comerica 5 more Years of Providing Benefit Cards to Elderly and Disabled

Wednesday, September 17, 2014
Comerica Bank Tower, San Jose (photo: Coolcaesar, Wikipedia)

Comerica Bank seemingly was on its way out of doing business with the U.S. Department of the Treasury after it was learned that the bank had exposed thousands of elderly and disabled Americans to fraud. But somehow it just got another deal with the agency…for another five years.


The Center for Public Integrity first revealed Comerica’s foul-ups last year. An investigation showed thousands of individuals “had their Social Security and other benefits illegally rerouted to criminals’ accounts because of weak fraud controls” at Comerica, Daniel Wagner reported.


The center also found that an “aggressive” marketing campaign by Comerica and the Treasury Department resulted in a million Americans being sent “Direct Express” benefit cards—used to distribute Social Security and disability payments—to people who didn’t need or request them. This resulted in a financial gain for the bank, given that card fees are much higher than direct deposit into an account, which many of the card recipients already had.


On top of that, it was discovered that the Treasury Department had rewarded Comerica with $32.5 million for work it was supposed to do for free. The improper government payment turned the bank’s potential 2013 loss of $24.2 million into an $8.4 million profit.


The findings were enough to prompt Treasury officials to announce that they would bring in another firm to handle the department’s “Direct Express” services that Comerica allegedly botched.


And yet, the maligned contractor is still around.


The decision has caught the attention of Treasury’s Office of the Inspector General, who now plans to review the steps that led to Comerica getting the five-year contract.

-Noel Brinkerhoff, Danny Biederman


To Learn More:

Treasury Extends Controversial Bank-card Deal with Comerica (by Daniel Wagner, Center for Public Integrity)

Federal Program to Pay Benefits without Checks Hurts Poor, Helps One Bank (by Noel Brinkerhoff, AllGov)


Louise 6 years ago
It seems as if the fraud is still occurring with this company. On the afternoon of Monday May 15, 2017 I attempted to make a purchase in the amount of $135.61 at Forever 21. This transaction was declined by the merchant twice. After proceeding to make the payment with another credit card, I checked my available balance on the Direct Express (Comerica Bank) app, to find that I had an available balance of about $49. Immediately, I proceeded to call Direct Express as I knew that the balance was incorrect. I spoke with a representative in the Fraud Department on May 15, 2017 and they immediately cancelled the card. The representative and I went through the fraudulent transactions and she informed me that not all of the transactions had cleared. She then advised to call back in two business days when all of the transactions cleared so that I could do one fraudulent claim instead of having to do multiple. On Wednesday May 17, 2017 I called Direct Express to make the fraud claim. The representative that I spoke with asked me a series of questions pertaining to the loss of card and identifying the fraud transactions. The transactions totaled $34630.75. After further reviewing the fraudulent transactions I noticed that some transactions were made within the same minute (only seconds apart). All of the transactions that were made were made at multiple ATM locations. This raises an alarm as the amounts that were taken (some totaling $803) would take at least 2 minutes or more to dispense from an ATM. From my understanding Direct Express is a third party company that manages the funds distributed by the Social Security Administration and by the Department of Veterans Affairs. As a disabled veteran I am very dissatisfied with the lack of security that Direct Express has provided on my behalf. The fact that an individual was able to dispense over 34K in one day from my account is unacceptable.
Alan Mazer 8 years ago
Comerica/Direct Express must be kicking back money to someone at the US Treasury because they continue to rip people off in many different ways but for the most part focusing on SSI/SSDI recipients direct deposit money, literally stealing funds and refusing to cooperate with law enforcement while the US Treasury continues to pay them millions. They stole money from us, refused to cooperate with law enforcement and perpetrated a fraud, they stole from us and get away with it somehow. Someone is profiting and you can bet your last penny it is internal and they believe they are above the law. someone has to put a stop to these bastards.
Maureen 9 years ago
Comerica's Direct Express cards were hacked into today. These are the cards that people on social security and disability are using. My daughter was lucky and only lost over $400.00 dollars (a charge in Johannesburg South Africa and one in Virginia Beach) Comerica said it will take them 45 to 90 days to replace the money! How are people whose only income is Social Security, Aid to Dependent Children, and Disability going to pay their mortgages, rent, lights, food, etc.?
max 9 years ago
NO veteran should have to pay ANYTHING to cash a check, or be required to have a bank account, or have to use a ATM.Money paid to vets that were in combat is"blood money"that they paid dearly for when in a "war for politics". SS could be more correctly called Social Insecurity, rather than the opposite. No tax should ever be charged for disability, or pension checks,especially VETS!!!!!! If "theft" were abolished,we wouldn't have to be concerned about any of these issues.
Joe 9 years ago
Either the contracting officer is extremely inept or this is just another example of crony capitalism.

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