June 04, 2020

Moulton Demands Answers from Treasury on Stimulus Debit Cards

Moulton’s Casework Team’s Investigation Found Unclear Process Causing Americans to Unwittingly Shred Stimulus Payments, Indicates Problem at Andover Mass and Austin Texas Facilities

SALEM, Mass. — Some of Rep. Seth Moulton’s constituents are mysteriously receiving stimulus payments in the form of plastic debit cards rather than by check or direct deposit. The congressman is demanding answers from Secretary of the Treasury Steven Mnuchin. 

“After President Trump delayed millions of Americans’ stimulus checks so that he could put his signature on them, his own Treasury Department is now sending debit cards from a third party. Many are led to believe these odd debit cards are fraudulent and therefore they throw out their stimulus payments,” Moulton said. “What a mess. It seems like the Trump Administration is more interested in finding ways to delay or prevent Americans from getting the help from Congress’ stimulus plan that people so desperately need in this tragic time.” 

The CARES Act, a bill Congress passed to bring financial relief to Americans reeling from the coronavirus, included a stimulus payment for many Americans. The amount Americans are supposed to receive is based on the amount of income they reported on their taxes.

Moulton’s Constituent Services Director began investigating the debit card issue after several constituents and senior-citizen groups contacted the office with concerns. She learned that constituents who have had their taxes processed at two of the Internal Revenue Service’s 10 national service centers are affected, and that about four million Americans whose taxes were processed by the IRS’s offices in Andover, Massachusetts and Austin, Texas, are receiving debit cards rather than checks. She also learned the cards are managed by a third party outside of the government which requires Americans to use their full Social Security numbers to activate the card.

Moulton’s office has heard from a number of residents who have thrown away their cards unwittingly. Some residents expecting a check instead received debit cards addressed to strangers. Others have received a portion of their stimulus money as a paper check and the other portion as a debit card.

The issues only start there. Constituents who defy the odds and successfully activate the cards must electronically transfer the funds to an approved bank account online or by mobile app. They can also withdraw funds at an approved ATM location, but some of the sites listed are at convenience stores, gas stations, and laundromats that people are unfamiliar with or uncomfortable using.

The activation process requires residents to provide their full Social Security number over the phone. Federal law allows the government to use Social Security numbers as an identifier, but it is against state law in Massachusetts. Consumer advocates, and even the IRS, frequently warn Americans against providing a Social Security number over the phone, and many consumer groups tell seniors to shred credit cards sent to them unsolicited in the mail. Fake credit cards are a common tool lenders use to sign up new customers that’s also been exploited by criminals.

Sheila Taylor, the Director of the Ipswich Council on Aging said: 

“More thought should have gone into this process before these debit cards were sent to people with very little information provided to the recipients. It almost could not have been any more confusing for all involved.

“Most people were not aware that they would be receiving their federal stimulus payment in the form of a debit card, instead of a check or direct deposit into their bank account. The envelope arrives in your mailbox with no return address. The debit cards are inside but many have thought they were simply credit card solicitations and almost shredded them without looking further.  If the card was thrown out or shredded, you can request a new one but the process to do so is very long and confusing.

“While a debit card may seem convenient to some, it can be a source of confusion for others. Many people feel that there are too many steps involved in accessing these funds, worry that the transactions are subject to fraud, want access to the full amount of their stimulus payment at once and, if they use their funds for purchases, don't want their purchases tracked. Why people who could not have their stimulus funds directly deposited into their checking account or could not all just receive a paper check, instead of these debit cards, is unknown to most people.” 

Moulton’s team estimates far more constituents than the ones that have contacted his office may have shredded their stimulus payment without realizing it. They are asking residents of the 6th Congressional District to contact them through this form so that they can investigate the issue further.

Americans have good reason to suspect the plastic debit cards are frauds. According to The Wall Street Journal, thieves targeting Americans and the systems built to help protect them from the virus’s financial effects are estimated to have stolen billions of dollars through crime and deception. Internet security firms have identified a Nigerian group dubbed Scattered Canary as the masterminds behind a massive operation to target unemployment agencies in Massachusetts and Washington state. Agari, the internet security firm that first identified the group, estimates Scattered Canary has stolen an estimated $4.7 million just by pairing variations of one fake Gmail address with several real Social Security numbers.

The coronavirus scams have prompted the Attorney General of Massachusetts to warn consumers about unsolicited phone calls and emails and issue a guide on how to avoid scams.

Even President Trump’s bank accounts made news recently after they were compromised. Last month during a televised press briefing, White House Press Secretary Kayleigh McEnany held up a check President Trump wrote to charity that included his full bank account and routing numbers.

Moulton wrote the Secretary of the Treasury seeking more answers on the debit card issue. A PDF of the letter is available here. The text of the letter is as follows: 

June 1, 2020

The Honorable Steven T. Mnuchin
Secretary of the Treasury
Department of the Treasury
1500 Pennsylvania Avenue, NW 
Washington, D.C. 20220

Secretary Mnuchin:

I write today to express my concern about the decision to distribute economic impact payments to 4 million individuals using debit cards. I appreciate the historic and massive task of distributing stimulus checks to more than 150 million Americans, but this action appears to have arbitrarily occurred for individuals whose taxes are processed in Andover, Massachusetts and is creating confusion, especially among senior citizens in my district.

Senior Centers, police departments, and other social service and government agencies have spent decades educating the public about how to stay vigilant and avoid scams that require Americans to give personal information over the phone after receiving credit cards and other documents in the mail.

The receipt of a prepaid debit card in the mail would normally be classified as a possible scam, and my constituents would be advised to shred the cards and letters they receive, or throw them out immediately. The IRS’ decision to mail economic impact payments completely undermines years of advice from trusted government officials.

Many of my constituents are experiencing economic hardship during this pandemic, and the economic impact payment is designed to offset some of that hardship. I have heard from constituents that have received the payment and used it the same day to pay rent, utilities, or other overdue bills. I’ve also heard from constituents who needed these funds urgently but unwittingly destroyed their debit cards because they were worried the cards were part of a scam, especially after hearing that they would receive their money in the form of a check, by direct deposit.

Further, we question the use of this financial tool, as it could undo the work of groups that educate the public about financial scams and warn them to destroy prepaid debit cards received by mail, potentially allowing scammers an opening to take advantage of the elderly or unwitting.

I have several questions about this issue:

  • At what point during the distribution process was the decision made to mail debit cards to some recipients?
  • We have become aware that debit cards are only being used for two tax processing locations (one in Andover, MA and a second in Austin, TX). Why is that the case?
  • For constituents that destroyed or discarded a legitimate debit card out of fear of fraud, what is the process for claiming the funds owed to them by law under the CARES Act?
  • How many Americans have or will receive stimulus funding by debit card and how many of those Americans live in Massachusetts?
  • Why must a recipient state their full name, address, and full social security number over the phone to claim these funds particularly because? Why not just the last four digits? This is extremely confusing for my constituents, because, as I am sure you are aware, it is against state law in the Commonwealth of Massachusetts to use social security numbers as an identifier. 

I appreciate your time and attention to this request and look forward to working with you to deliver these funds to my constituents.


Seth Moulton
Member of Congress