Comerica pressured over handling of government program fraud claims

Comerica Bank has been battling allegations for years of mishandled fraudulent transactions in violation of U.S. federal banking laws. A series of class-action lawsuits against the bank recently certified by a federal district court judge provide scope into the alleged failings.

In 2008, the Treasury Department selected Comerica as its financial agent to distribute monthly benefit payments to roughly 4.5 million veterans and Social Security recipients through the Direct Express prepaid debit card program. The current agreement between the agency and bank is not set to expire until January 2025.

“For most cardholders, this payment is their sole source of income and is essential for basic living needs, such as housing, food, and medicine,” according to the Treasury. Yet, thousands of Direct Express cardholders have reported being robbed of these basic essential needs after being targeted by fraudulent and unauthorized transactions. An investigation spearheaded by Sen. Elizabeth Warren (D-Mass.) in October 2018 described the Direct Express program as “plagued by incidents of criminals impersonating beneficiaries and draining their accounts.”