Research indicates that over 60% of Direct Express® cardholders depend on federal benefits as their sole source of income. It is, therefore, critical that cardholders have the strongest possible protections against criminals who may want to steal their benefits. Direct Express® strives to balance accessibility and convenience with strong security. It does this by incorporating technological protections from fraud, conducting proactive oversight of transactions, and making extensive cardholder education and customer service options easily available to all cardholders.

One of the benefits of switching federal benefit payments from paper checks to a prepaid debit card is that doing so improves consumer protections, especially for those who depend on their monthly benefit for basic living expenses. Individuals receiving federal payments electronically, rarely have delays or problems with their payments. In contrast, more than 40 percent of the claims filed regarding Treasury-disbursed payments are related to paper checks—even though checks constitute only around 5 percent of such payments.

Beneficiaries who receive their federal benefit payments through Direct Express® avoid the inconveniences and vulnerabilities associated with the delivery of benefit payments by paper check. They do not have to wait for a check to be delivered in the mail or deal with the possibility that it might get lost or stolen, and, critically, cardholders do not bear the same risk of loss or theft associated with cash. In annual cardholder satisfaction surveys, over 95 percent of cardholders report they feel safer with Direct Express®.

That does not mean, of course, that fraud has been eliminated for all electronic payments. Fraud occurs throughout the payment system. With 3.6 million active cardholders and payments totaling billions of dollars per year, the program will always be a target for would-be criminals and therefore Direct Express® strives to maintain the very highest standards of security. This has resulted in fraud levels for the program historically being lower than those in similar prepaid debit card programs.

There are a number of ways in which Direct Express® protects cardholders from fraud, including:

  • Chip Card Technology: Direct Express® integrates the “EMV” chip into its cards – technology that is considered the global standard in card protection. EMV aims to prevent counterfeiting, making it more difficult for criminals to “clone” cards. More than 4.5 million EMV Cards have been issued to date.
  • “Regulation E” Protection: The same consumer protections for fraud, loss, and errors that are provided to traditional bank account holders under the Consumer Financial Protection Bureau’s “Regulation E” are provided to Direct Express® cardholders.  Regulation E is a federal regulation that protects Direct Express® cardholders from unauthorized use of their cards and provides guidelines for banks and sellers of debit cards to maintain these protections.
  • FDIC Insurance: Direct Express® cardholders’ money is FDIC-insured up to the maximum legal limit ($250,000 per depositor, per insured bank, for each account ownership category).
  • Fraud Monitoring: 100 percent of Direct Express® prepaid transactions are monitored worldwide, 24/7.
  • Benchmarking: Fraud teams provide regular, detailed review of program protections, measuring types of fraud, merchant categories, and security performance against peer programs. This ensures Direct Express® stays at the cutting edge of fraud protection.
  • Mobile Alerts: Direct Express® provides a suite of alerts beneficiaries may sign up to receive. Among those are automated mobile alerts advising the beneficiary when a deposit has been made to their account and when their account balance is low, allowing them to self-identify suspicious activity.
  • PIN Validation on Mobile App: A recent additional protection requires beneficiaries to enter their card PIN before performing Contact Information updates, Document Setting updates, Alert updates, and Card Replacement requests.
  • Lock/Unlock on Mobile App: Direct Express® allows cardholders to lock and unlock their card if they have misplaced it, thereby allowing them to protect their card from unauthorized use until or unless they find it. This feature, which was introduced in late 2022, has come to be one of those most used by cardholders.
  • 24/7 Customer Service: Direct Express® customer service is available 24/7 for cardholders who notice suspicious activity in their account or have questions about how best to protect themselves.

These protections are supplemented by a focus on educating and empowering cardholders to protect themselves from fraudsters. The program actively engages cardholders through instructive mailings and provides online educational tools through the Direct Express Financial Education Center, an integrated financial capability program. Direct Express® also has 24/7 customer service available to answer cardholder questions by telephone, advising them on security and other issues.

SOURCE: DIRECT EXPRESS®