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Consumer Banking and Payments Law: 9.2.3 Disadvantages of Check Payments

While certain individuals can receive federal benefits by check, this may not be a good option for them. The check can be sent to the wrong address, lost, or stolen, which can delay access to the benefits. Cashing the check without depositing it in a bank account may incur check cashing fees.

Consumer Banking and Payments Law: 9.3.1 Direct Deposit Described

The most common method today for payment of federal benefits is the Treasury Department directly depositing the payment into the consumer’s account at a qualifying financial institution. The individual designates a financial institution through which the electronic funds transfers are to be made and provides the federal agency with the information it needs to process the payments.32

Consumer Banking and Payments Law: 9.3.3 Direct Deposits Fraudulently or Mistakenly Transmitted to a Wrong Account

A federal payment can be directly deposited into the wrong account—for example, if the recipient enters the incorrect account number or if someone posing as the recipient redirects the recipient’s money into their own bank account, to their own prepaid card account, or even to a prepaid card account fraudulently in the consumer’s name that is immediately emptied. Consumers, though, have protections in such cases, although there will be at least a temporary loss of access to the misdirected funds.

Consumer Banking and Payments Law: 9.3.4.1 Generally

Social Security, Supplemental Security Income (SSI), Department of Veterans Affairs (VA), and a number of other federal benefits are exempt from seizure by creditors, even when deposited into a bank account. However, before federal protections were enacted in 2011, banks that received a garnishment order would freeze funds in the consumer’s account up to the amount of that order, including exempt deposited federal benefits.

Consumer Banking and Payments Law: 9.3.4.2 How the Rule Operates

Upon receipt of a garnishment order against an account holder, the bank must review all accounts owned by that individual to determine whether any of the specified federal benefits were electronically deposited during the “look-back period”—the preceding two months. If so, the bank must protect from a freeze or seizure the lesser of the sum of all exempt benefits electronically deposited into the debtor’s account during the look-back period or the balance in the account at the time the review is conducted.53

Consumer Banking and Payments Law: 9.5.1 Introduction

The Direct Express card is the default method of delivering federal benefits to any recipient who does not designate an account for direct deposit. According to the Treasury Department, there are 4.5 million active Direct Express cardholders each month.61

Consumer Banking and Payments Law: 9.5.2 Direct Express Card Fees and Terms of Use

The current terms and conditions of the Direct Express card and the rights of benefits recipients are set through the Treasury Department’s contract with Comerica Bank, which expires at the end of 2024.68 There are no regulations governing the card’s terms, but the terms and uses of the card are discussed in the explanatory material accompanying the final rule adopting the Direct Express card as the default method of making federal payments to those who have not set up direct dep

Consumer Banking and Payments Law: 9.7.1 Introduction

The Treasury Department has discontinued the Electronic Transfer Account (ETA) Program. ETAs allowed all recipients of Social Security, SSI, and other federal benefits to establish bank accounts, receive payments electronically, and avoid many fees that may accompany standard bank accounts. Effective September 2018, all ETAs have been closed.

Home Foreclosures: 17.1 Introduction

Sometimes homeowners facing foreclosure are desperate enough to try any offer that looks like it may save their home, even if it costs thousands of dollars or puts the homeowner’s equity at risk. Foreclosure rescue scammers take advantage of homeowners’ desperation through a variety of schemes.

Home Foreclosures: 17.2.1 Generally

Foreclosure rescue scams are various types of schemes targeted at homeowners already facing foreclosure and in financial distress.13 When homeowners have significant equity in their homes or when property values are appreciating, foreclosure rescue scams often focus on obtaining title to the home and robbing homeowners of their equity. When homeowners have little equity, scams center on squeezing upfront fees—often thousands of dollars—from borrowers.

Home Foreclosures: 17.2.4 Loan Modification Scams

After home values dropped in the late 2000s and many borrowers could no longer refinance their way out of foreclosure, many rescuers became high-volume “loan modification specialists.” Loan modification scams are a newer variant of the “phantom help” type of foreclosure rescue scam.48 This scam is most common when borrowers have little or no equity to extract. The pitch by this breed of rescuers is that, for a fee, which can reach several thousand dollars, they will negotiate a loan modification for a financially distressed borrower.

Home Foreclosures: 17.3.2.1 The Homeowners’ Story

The client interview process is important to understanding a foreclosure rescue scam transaction. Homeowners’ testimony can make their story come alive. Unfortunately, the speed at which these transactions happen, usually as a result of an impending foreclosure, may leave the consumer confused and unable to remember the details of the transaction. Often, however, they can re-trace their steps and provide at least a general overview of the transaction. Discussing the case in a chronological fashion may also help the homeowner remember what happened next in the sequence of events.

Home Foreclosures: 17.3.2.2.1 The importance of the documents

The documents related to a foreclosure rescue scam can tell a significant part of the story—one that is often more complete than that told by the homeowner. Obtaining any and all paperwork that may exist—from the solicitation materials to deeds and leases to eviction papers—is critical to challenging a foreclosure rescue scam. It is useful to gather as much documentation from the public record as possible before conducting a full interview of the client, so as to make the interview more productive. If this is not possible, a second interview may be necessary.

Home Foreclosures: 17.3.2.2.3 Transaction documents

The number of transaction documents in any given foreclosure rescue scam can vary dramatically. At one end of the spectrum, the homeowner may execute only one document—a deed. At the other end, some scams involve complex trust arrangements that may contain ten or more different documents.

Home Foreclosures: 17.3.4.1 Need for Quick Action and to Determine the Homeowner’s Goals

Time is often of the essence in fighting foreclosure rescue scams. Many times, these cases first present themselves as eviction cases instead of deed theft or foreclosure rescue cases. It is important to act quickly to stop any eviction proceedings and to get a notice of lis pendens or notice of equitable mortgage recorded against the property to preserve the homeowner’s remedies, especially as to third parties.134

Fair Debt Collection: 15.3.1 Overview

The right to privacy is recognized in some form in almost all jurisdictions.166 Various statutes and regulations protect consumers’ privacy, either generally or with respect to specific information, such as banking, health care, or receipt of public benefits.167 Protection of confidential information is also required by the rules governing lawyers and health care professionals, among others.168 The FDCPA and state debt collection statutes protect s