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Chapple v. Comerica

NYLAG Sues U.S. Treasury and its Contractor for Failure to Adequately Investigate Benefits Fraud

About Chapple v. Comerica

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Name: Chapple v. Comerica 
Dkt. #: 21 Civ. 4978
Court: E.D.N.Y.
Judge: LaShann DeArcy Hall
Status: Settled
Claims: Violation of the Electronic Funds Transfer Act, Breach of Contract, Due Process.
Contact: If you live in New York City and have problems with receiving your SSI or SSDI benefits on a Direct Express prepaid debit card, call 212-613-5024 


NYLAG client Harriet Chapple has extremely limited assets and no income apart from her Supplemental Security Income (SSI) benefits. She received her SSI benefits on a “Direct Express” prepaid debit card, operated by the Comerica Bank as contractor for the United States Department of the Treasury. On April 12, 2021, two ATM withdrawals totaling approximately $1,000 were made on Ms. Chapple’s Direct Express account. Ms. Chapple did not make these withdrawals, did not authorize anyone to make them, and does not know who made them. On that same day, Ms. Chapple reported the fraudulent withdrawals to Direct Express, and she followed up the next week with a written fraud report. 

Defendants were required by law to investigate Ms. Chapple’s fraud claims and  limit her liability due to her timely reporting, and the law placed the burden of proof on Defendants to prove that Ms. Chapple authorized the transactions. However, Direct Express denied Ms. Chapple’s fraud claim within a week, purporting to have “found a conflict in the information provided by [Ms. Chapple] and the information resulting from [Direct Express’s] research.” When Ms. Chapple exercised her legal right to request the documents underlying Direct Express’s denial of her claim, Direct Express produced only the relevant account ledger. Ms. Chapple is not alone. Direct Express’s failure to adequately investigate fraud has been widespread and widely reported, and harms many other Americans. NYLAG sued on Ms. Chapple’s behalf. 

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