{"id":368883,"date":"2022-05-19T19:08:48","date_gmt":"2022-05-20T00:08:48","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/litigation\/filing-a-lawsuit\/can-i-sue-a-prepaid-debit-card-company-involving-federal-benefit.html"},"modified":"2026-06-03T10:20:13","modified_gmt":"2026-06-03T15:20:13","slug":"can-i-sue-a-prepaid-debit-card-company-involving-federal-benefit","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/litigation\/filing-a-lawsuit\/can-i-sue-a-prepaid-debit-card-company-involving-federal-benefit.html","title":{"rendered":"Can I Sue a Prepaid Debit Card Company Involving Federal Benefits?"},"content":{"rendered":"\n
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Can I Sue a Prepaid Debit Card Company Involving Federal Benefits?<\/h1>\n\n
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\n By Steven Ellison, Esq.<\/a> | Legally reviewed by Steven Ellison, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

Yes, if you are the victim of fraud, you may be able to sue your prepaid debit card company if they fail to reimburse you for the money you are out. <\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

Editor’s Note: The class action lawsuit against Comerica and Conduent mentioned in this article has been settled. It is no longer possible to join this lawsuit.<\/em><\/p>\n

You must follow the company’s terms and conditions procedures, including properly and timely notifying the company of fraudulent transactions. Still, as long as you do, you may have claims for breach of contract and violation of a federal statute.<\/p>\n

If you struggle to get reimbursed for money stolen from your account, you should talk to a\u00a0consumer protection attorney<\/a>.<\/p>\n

Using Prepaid Debit Cards for Your Federal Benefits<\/h2>\n

Prepaid accounts are among the fastest-growing consumer financial products in the United States. Through Direct Express, a direct deposit option, you can use them with your government benefits, such as Social Security, Supplemental Security Income (SSI), and veteran’s benefits.<\/p>\n

You can get a MasterCard for your Direct Express account through Comerica, which Conduent Business Services operates. You can use your card like a credit card at ATMs and retail stores and store money in your account like a checking account. Prepaid accounts are a convenient way to manage your money without opening an account at a bank or a credit union. With a prepaid account, you cannot spend what you don’t have.<\/p>\n

They also provide some protection against\u00a0garnishment<\/a>\u00a0from debt collectors. Generally, creditors can’t garnish many federal benefits such as Social Security except for back child support and government debts. Unlike bank accounts or credit union accounts, prepaid account information doesn’t get reported to credit bureaus. A creditor cannot garnish an account it cannot find.<\/p>\n

You May Be a Victim of Fraud<\/h2>\n

Someone who gets your account information can steal your benefits from your prepaid account. Imagine this scenario: Suppose you have retired and receive Social Security. You get your benefits deposited into your prepaid account each month. You’re frugal, so you accumulate, let’s say, $30,000 or so.<\/p>\n

Somehow, someone in Bermuda gets your card number. They drain your entire account. You notify Conduent of the fraud. They cancel your card and conduct an investigation. Even though you have never been to Bermuda, they determine that no fraud occurred and refuse to reimburse you for your loss.<\/p>\n

You don’t work; you need that money. You can’t afford to lose any amount, much less 30 grand. You won’t be able to get by if you don’t get your benefits back. Although you complain to customer service, they politely inform you that their decision is final.<\/p>\n

No need to panic. You may be able to sue Comerica and Conduent to recover your lost benefits under a couple of different legal theories.<\/p>\n

Was There a Breach of Contract?<\/h2>\n

The first is for breach of contract. A contract is an exchange of promises that the law recognizes as binding and provides a remedy in court. A contract consists of three elements:<\/p>\n