What will happen to the inevitable seniors who fail to make the switch… Will their checks just stop coming?
While roughly 93% of federal payments are currently being made electronically, there are still 5 million checks being mailed out each month. The states with the most people still receiving paper checks are also the biggest – California, New York and Texas. It is likely that many of those who haven’t made the switch are seniors. While monthly checks will NOT just stop being mailed, the government will be sending more frequent and more urgently-worded requests in the mail urging people to go electronic. The Treasury is using the language “you are failing to comply with the law” – basically stating that you are breaking the law if you do not make the switch by March 1, 2013. There is also talk that the Treasury may just send those who fail to switch a Direct Express card instead of paper checks.
What’s a Direct Express card?
This is an option for people who don’t have a bank account. The Direct Express Mastercard is it a debit card that works just like an ATM card. When you sign up for it, you will receive the card in the mail, and then each month your payments are automatically added to the card. While most of the services are free, there are optional services (for a fee) that include additional cash withdrawals over the one free withdrawal per month and transferring funds to a bank account.
What about fraud… Can this new system open up the elderly to scam artists?
One of my biggest concerns about a nationwide sweeping change like involving money like this is fraud, especially when older Americans are involved. While ultimately, the Treasury believes electronic payments will dampen cases for fraud, they may be more rampant now during this transitional period. In fact, the Inspector General has already found that this new policy has led to an increase in fraud perpetrated primarily on elderly beneficiaries. In most cases, criminals obtained sensitive personal information and were redirecting direct-deposits to fraudulent accounts. If you receive the Direct Express card, you may also be at risk because it works very similarly to an ATM card with little identity verification needed. I urge seniors to be cognizant of scam artists who may try to call or send requests through email. The government will never call you asking for this information. They will ask you to all their toll-free number of go online, so do not give any personal information to unsolicited callers.
Finally, what can seniors or their loved ones do to make sure they are getting their payments?
If you choose direct deposit, go online every month to make sure your federal benefit has been received or if you do not have internet access, go directly to your bank. If you choose the Direct Express card, make sure the money was automatically loaded every month by visiting the website or checking the card’s balance at an ATM machine. You may also sign up for notifications of deposits on the debit card by phone, email or text message. Loved ones can certainly help seniors with this as well. My aunt doesn’t know how to text message, so the odds are that granny doesn’t either.