Money that’s supposed to help older Americans and veterans disappearing. Hundreds of cases have been reported, and 7Investigates spoke with a victim who is demanding change
Derek served in the Marine Corps, and now has severe PTSD. The disabled veteran lives in Bourne and relies on government benefits to get by. But last year, some of those benefits vanished.
“That money is his money. He’s earned it. And it was gone,” said Jackie, Derek’s brother-in-law and caregiver.
She said Derek’s financial lifeline is his Direct Express prepaid debit card, part of a program overseen by the federal government which lets people get their Social Security and Veterans Affairs benefits electronically. But last summer, Jackie discovered $814 in disability payments had disappeared from Derek’s account.
“Somebody claiming to be me called up and fraudulently stole his money,” Jackie said. “I immediately went into panic.”
Jackie said the bank that runs the federal program told her the money was wired to someone claiming to be her. She soon connected with other people who had similar issues, and discovered she was one of hundreds from coast to coast who have reported money stolen from their Direct Express accounts
“I was outraged. I was absolutely outraged,” Jackie said. “I felt like I failed him because I’m the payee on his account. I’m responsible for that money.”
She pressed lawmakers to investigate. And Senator Elizabeth Warren, D-Mass., did, demanding answers from the bank that runs the program, and found 480 cases of fraud reported across the country, starting in August 2017 and gradually increasing in number over the next year. Warren’s Office found a total of $460,000 had been stolen during that time period.
Jackie said she doesn’t believe the program is secure.
The Office of the Inspector General for the Treasury Department, which oversees the Direct Express program, told 7Investigates that it is now actively investigating “instances of account fraud and theft.”
The bank that runs the program wouldn’t answer 7Investigates’ questions. But it told Warren’s office that it no longer allows people to call and wire their benefits without having their physical card, known as the Cardless Benefit Access feature. It also said that everyone who lost money has been reimbursed.
It took Jackie months to get Derek’s money back. But she wants a larger investigation of the entire program to make sure millions of Americans like Derek get the money they depend on.
“This is the only money that they have, and they deserve this money,” Jackie said. “Unless it happens to you, you don’t know that it can happen.”
Jackie and nine others have filed a class-action lawsuit in federal court in Georgia, claiming Direct Express cards are “unsafe and… rife with fraudulent transactions,” and that “the fraud found by Senator Warren’s investigation… is just the tip of the iceberg.” The lawsuit details several incidents involving people who use Direct Express cards who claim unauthorized withdrawals or charges showed up on their accounts, each one resulting in the loss of hundreds of dollars in benefits.
In court documents, the bank that runs the program said the lawsuit has no merit.
People with Direct Express cards who want to opt out of the program can apply for a waiver and receive a paper check instead. But the Treasury Department says such waivers are granted only in rare circumstances.
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