Dec 30, 2011

Direct Deposit Fraud

     A television station in Tampa is reporting that there have been two dozen instances locally in recent months of Social Security direct deposits being diverted to bank accounts not controlled by the person who is supposed to be receiving the money. 
     This is highly worrisome since it may be impossible to prevent under current practices and could spread quickly. I don't think this is the last we will hear of this problem.


Anonymous said...

We have claimants that have payee's, and they will go to a bank without the payee's knowledge to set up an account. While they are there they will set up direct deposit throught the auto enrollment sysem. This system will update the direct deposit information on the mbr regardless if there is a payee on the record. Therefore, claimants themselves have the ability to redirect funds into another account without the payee knowing. I contacted regional office to explain the loop hole, the response I got was, "That's the banks fault."


No Saj said...

There is supposed to be some degree of trust with repayees and payees. While I do beleive SSA should intervene if a payee reports a problem, I don't see why SSA should be intimately involved in that relationship once it has made the decision that the repayee is trustworthy. And in cases where the payee is incapable of knowing if he is being defrauded or not, I imagine local state and social services would be involved.

I'm in agreement with the regional office on this.

Anonymous said...

Except, that is the bank's fault.

Should there be a review of all address and direct deposit data by SSA if a claimant has a record and the new account was posted through the auto enrollment process? Maybe there should be, however, the instances in the news report are people who may not have had payees.

And 3 months to get a check refunded? Sounds more like he never bothered to claim he did not receive the check and have a stop payment put on it.

Anonymous said...

SSA should be out of the rep payee monitoring business, period, except for minor children. It's an unmanageable workload. IMO, payees should be limited to legal guardians (not conservators) and parents of minor kids. Otherwise, pay directly.

Anonymous said...

OIG has an internal group investigating this now - apparently, it is a nationwide thing with theft rings using stolen information (obtained through social engineering techniques) to redirect and steal direct deposits by going around SSA via the banks.

This problem will only increase in magnitude as the May 2013 mandatory direct deposit deadline approaches.

Anonymous said...

Correct, 6:37. This has nothing to do with rep payees. This has been going on all year--my FO has had several instances of this fraud.

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