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New SSD payment methods are inspiring fraud

Last month, we discussed some of the ways in which individuals receiving Social Security benefits are either doing so by intentional fraud or by actions that the Social Security Administration (SSA) could potentially label as fraud. However, fraud in either application for benefits or continuing to receive benefits fraudulently are not the only ways that fraud is affecting individuals receiving Social Security Disability (SSD) benefits. In fact, the ways in which the SSA pays SSD recipients have increasingly become targets for fraudsters and thieves from outside the system.

In March of this year, individuals receiving any kind of Social Security benefits were required to switch from receiving those benefits via paper checks to receiving them via either a prepaid debit card or direct deposit. This transition was made system-wide after more than a dozen years of more minor transitions away from a paper check system.

The move was made in an effort to cut costs associated with the printing and mailing of paper checks. However, this payment method shift has been costing some recipients their benefits through fraud and theft of their prepaid debit cards. Unlike checks which can be securely deposited into a bank account and held safely there, prepaid cards can be stolen as easily as credit cards can. In addition, these cards tend to cost recipients increased fees for their usage, which is a particularly frustrating reality for individuals living on fixed incomes.

In addition, new fraudulent schemes have popped up in the wake of the transition, aimed at targeting vulnerable populations like elderly and mentally disabled persons. Individuals who did not grow up with an abundance of portable electronic technology are often unaware that they should not reveal any personal account information to individuals over the phone or Internet unless they have initiated a call to the SSA. As a result, more and more beneficiaries are losing their benefits to scam artists who are taking advantage of prepaid debit card information through fairly straightforward schemes.

If you are at all struggling with your new SSD payment methods or believe that you may have been the target of a fraudulent scam, please contact the SSA and an experienced attorney who can help you explore your legal options.

Source: Mainstreet.com, "Are Fees, Fraud Eating Away at Your Social Security?" Shelby Bremer, Credit.com, July 1, 2013

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