October 16, 2018

Warren Seeks Answers from Comerica, Social Security Administration, and VA on Direct Express Fraud, Security Breaches

Senator Asks for Information on Breaches That Led to Hundreds Becoming Victims of Fraud; Criticizes Comerica for Lack of Transparency

Letter to Comerica (PDF) | Letter to SSA (PDF) | Letter to VA (PDF)

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) today sent letters to Comerica, the Social Security Administration (SSA), and the Department of Veterans Affairs to seek answers about security breaches in Comerica's Direct Express debit card program which led to hundreds of Americans becoming victims of fraud when their Social Security, disability, or other federal benefit payments were stolen.

Since 2008, Comerica has administered the Direct Express program, which serves 4.5 million Americans and their families by providing prepaid debit cards allowing recipients without bank accounts to access Social Security and other federal benefits. However, according to a report in American Banker, a series of security breaches allowed criminals to steal information from recipients in order to impersonate them, make fraudulent purchases, and drain the prepaid cards of the federal benefits.  While Comerica claims that the schemes affected "only a few hundred cardholders," the company has not been transparent as to how the security breaches occurred or how many individuals were affected in the fraud schemes.  Further reports indicate that victims were not notified of the fraud scheme, spent months disputing fraudulent charges, or were charged fees to reissue and activate new cards after the fraud was discovered.  

In the letter to Comerica CEO Ralph Babb, Jr., Senator Warren raised concerns about the company's security vulnerabilities, mismanaged responses to the security breaches, misleading and cruel customer service response tactics, and lack of transparency about the breaches and subsequent fraud schemes.  The letter also asks a series of questions about what caused the fraud schemes and how the company is addressing them. 

"These are highly disturbing reports, particularly regarding a company that is receiving taxpayer dollars to effectively provide essential services for vulnerable families," wrote Senator Warren. "Americans deserve information about the breaches, what you are doing to help those impacted, and how you are going to protect federal benefit recipients from future fraud."

In her letters to Acting SSA Commissioner Nancy Berryhill and VA Secretary Robert Wilkie, Senator Warren requested information about the agencies' knowledge of the security breaches at Comerica and asked a series of questions to better understand why the agencies are partnered with the company.

The senator is seeking answers to her questions by October 30, 2018.