WPBN: In a statement released on December 6, the Consumer Financial Protection Bureau (CFPB) stated that they have filed a lawsuit against Comerica Bank for persistently failing its 3.4 million Direct Express cardholders. These cardholders were mostly unbanked Americans who were collecting Social Security benefits.
California is the third most numerous state in terms of the number of Comerica branch locations, with 90, trailing Texas and Michigan in this regard.
According to the affidavit filed in court, Comerica, through its vendors, charged more than one million Direct Express cardholders ATM fees in order to access their government benefits in circumstances in which they were eligible for free withdrawals.
Additionally, the Consumer Financial Protection Bureau (CFPB) asserts that Comerica suppliers purposefully terminated nearly 25 million customer support calls from cardholders who were waiting on hold.
Comerica offers around three billion dollars in benefits
Comerica has been in possession of an exclusive contract to administer the Direct Express program since January of 2008. This contract allows Comerica to provide prepaid cards and account services to individuals who are recipients of specific benefits.
These benefits include Social Security and supplemental security income (SSI) for adults and children with disabilities, veterans’ pension and education assistance, civil service retirement, and other specific benefits.
It is estimated that about 4.5 million Direct Express cardholders receive approximately $3 billion in benefits from Comerica on an annual basis.
Deficient customer service
According to the statement filed with the court, Comerica has been delivering inadequate customer support on a consistent basis from April 1, 2019, which has made it more difficult for cardholders to safeguard and access their funds.
“For example, the Bank’s vendors have intentionally terminated almost 25 million customer-service calls from cardholders who were on hold before the cardholders could speak to a representative, and cardholders whose calls were not terminated have been frequently subjected to excessive wait times to speak with a representative, sometimes up to several hours,” according to CFPB’s court document.
They continue by saying that customers occasionally get in touch with Comerica to claim they were deceitfully registered in the Direct Express program as a result of someone opening an account in their name.
They further claim that Comerica obliged users to apply for a new debit card instead than honoring timely stop-payment requests.
For a while, cardholders were unable to access their own money, and Comerica charged them extra to speed up delivery when they wanted to reduce the amount of time they were without a card.
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Unlawful ATM charges
ATM fees that customers did not due were charged by Comerica suppliers between April 1, 2019 and April 30, 2024.
According to a notice given to cardholders, each time money is deposited into their Direct Express accounts, they are eligible for one free ATM withdrawal per month. For each extra withdrawal, Comerica sellers charge a fee.
Additionally, “There is no ATM denial fee associated with this account,” according to the notice.
A 1–5 day lag was created when Comerica suppliers reset cardholders’ free ATM withdrawal perk days before benefits were available. During this period, unsuccessful ATM withdrawals may inadvertently use the monthly free withdrawal without informing cardholders.
In this case, Comerica’s vendors charged the cardholder an ATM withdrawal fee for the first transaction that was successfully executed after the freshly deposited funds were made available for withdrawal.
For ATM withdrawals that ought to have been free, Comerica assessed fees to over a million Direct Express users.
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The victims’ relief fund
The CFPB is empowered to take action against organizations that violate consumer financial protection laws, such as by participating in unfair, dishonest, or abusive conduct and practices, under the Consumer Financial Protection Act.
In addition to providing compensation for injured borrowers, the CFPB’s complaint aims to cease Comerica’s illegal actions and impose a civil money penalty that will be deposited into the agency’s victims relief fund.
Consumers can contact the CFPB by phone at (855) 411-CFPB (2372) or online to file complaints regarding financial products and services.
