Bamboozled: An unwelcome charge

Getting rid of paper checks can save businesses lots of money.BB branding

The federal government sees it that way, too, and that’s why as of March 1, Social Security recipients will no longer have the option of a paper check. They must receive their benefits as a direct deposit into a bank account, or the funds can be placed directly onto a debit card called Direct Express.

Along with other advantages, the government touts the card as a way to ensure paper checks won’t be stolen out of your mailbox.

But what happens when your card is stolen and fraud ensues?

Very little, according to Joann Kornas, a 76-year-old Social Security recipient and Direct Express card user.

“They assured me that it was the safer way to get my money than having a check sent to my home,” Kornas said.

She ended up learning about fraud the hard way.

In June 2012, the Kenilworth woman went shopping for yarn at her local Walmart. She used her Direct Express card to pay the bill.

“I thought I put the card back in my wallet, but when I got home I realized it was missing,” she said, glad that she had the foresight to write down her account number at home. “I immediately called the Direct Express company and reported it missing or stolen.”

22513The rep said her card would be canceled and she would be issued a new one.

Kornas’ monthly benefit is about $1,500, but she knew there wasn’t a lot of money in the account when the card went missing. Just before visiting Walmart, she had gone to her bank to make her mortgage and car payments, leaving her with less than $90 on the Direct Express card.

But now that was gone.

“It had been zeroed out at Home Depot, which is right next door to Walmart,” Kornas said. “Two transactions were done, one for $1.62 and the other for $85.26, at the same time.”

She said Direct Express assured her the money would be put back on the new card, and she filled out the requested fraud paperwork.

The $1.62 charge was returned to the card, but the one for $85.26?

Not so easy.

Direct Express sent a letter that essentially said the $85.26 charge wasn’t clearly fraud.

Kornas didn’t understand.

“I called and asked how two transactions could be done at the same time at the same store after I had reported the card missing, and one of them is fraud and the other isn’t,” she said. “I did not get a good answer to that.”

She said she appealed, and Direct Express said she needed a police report.

Kornas went and got one, and she mailed it in, she said.

On July 16, Kornas received another letter from Direct Express.

“During our investigation, we found a conflict in the information provided by you and the information resulting from our research,” the letter said. “Based on this information, we cannot confirm that fraud occurred.”

The letter recommended she contact the merchant.

So she did. Home Depot said it had no record of the transactions, even though Direct Express had the transactions on its records, she said.

Kornas tried Direct Express again, but she said she got nowhere.

“I knew they were reading to me off a script,” she said. “Also, they accused my family members of stealing my card, I guess because I’m 76, but believe me, no one is getting over on me. And my daughter laughed, because she said if she was going to steal anything it would have been for more than $85.26.”

The only advice she received, again, was to call Home Depot, she said.

“I gave up,” she said. “I was reading my Star-Ledger the other day and read an article about someone being Bamboozled and thought, “What could it hurt if I wrote to you?’ So I did.”


More than 3 million Americans received their Social Security payments through a Direct Express card as of July 2012.

The company was unable to tell us how many use the card today, but we expect that number will soar as all beneficiaries need to choose between direct deposit or using the Direct Express card by next week.

We asked Direct Express, which is run by Comerica Bank, to review Kornas’ case.

In two days, we received an e-mail from a very happy Kornas.

“This morning, when I checked the balance on my Direct Express card, I discovered that they credited me with the $85.26 that was taken from my card last June,” she said. “I can’t believe you accomplished this so fast after all I went through to try to resolve it.”

Thanks to the folks at Direct Express for taking another look at the charge in question and for ultimately doing the right thing.

We asked what happened in the first place, why Kornas’ fraud complaint was initially denied, and why she never received a phone call that the money was back in her account.

“We must protect the privacy of customer information, so I am unable to provide the details you requested about this particular situation,” said spokesman Wayne Mielke.

Kornas said she will keep using the Direct Express card, but she plans to take the money out of the account quickly. In that case, if her card ever goes missing, she won’t lose anything and have to go through this process again.

“I hope many seniors on Social Security will benefit (from my story) by being more careful with their Social Security money if it is on a debit card,” she said. “I didn’t lose much and I’m super careful now, but for the many older people who don’t know, they should be careful before it’s too late.”