The senator wants Treasury to enhance fraud protection in the Direct Express prepaid program — now a partnership with Comerica Bank — when its contract is rebid in 2020.
Netspend customers kept from accessing paychecks; Sen. Elizabeth Warren rebukes Comerica over fraud in benefits program; FDIC poised to revamp deposit rules (about time, say banks); and more from this week's most-read stories.
In hundreds of cases, the prepaid card program run by the bank allegedly sent users’ funds to fraudsters who had stolen their data. The security lapse has now caught the attention of the Democratic senator.
The payments, which total more than $10 million, stem from a 2017 settlement with the Federal Trade Commission. The agency charged that NetSpend deceived consumers by advertising that they could get immediate access to their funds.
The Texas bank, which partners with the U.S. Treasury to dispense federal benefits via prepaid cards, is alleged to have dropped the ball as hundreds of cardholders say their money was forwarded to fraudsters posing as them.
