Treasury Urged to Preserve Paper Benefit Checks

Under new regulations proposed by the Treasury Department, Americans who receive federal benefits like monthly Social Security and Supplemental Security income would no longer be able to receive these funds by check, and groups including Consumers Union are asking the Treasury to reconsider.

According to the Treasury’s plans, beneficiaries would have to switch to electronic payments, either by having funds deposited directly into their accounts or onto a prepaid debit card issued by the government.

In comments filed with the Treasury Department, Consumers Union, the publisher of Consumer Reports, urged the agency to allow consumers to continue receiving their benefits by check and to limit the fees and improve the customer service associated with the Direct Express prepaid card for those consumers who choose this option.

"Electronic payments are not safer, easier, and more convenient than checks for all types of benefit recipients," said Consumers Union staff attorney Michelle Jun in a statement. "Consumers should be able to choose the option that is best for them, including paper checks. And if the government is going to encourage benefit recipients to use prepaid cards, it should do more to limit the fees charged for using them and make them easier to use."

The Treasury Department has received numerous comments from consumers who have raised concerns about the switch to electronic payments. Those comments and Consumers Union's concerns were summarized in a letter to the Treasury.

“My parents, having poor memories and even poorer technical skills, find it easier to deal with a paper check that they can see, hold and read before taking it directly to their own bank,” said one comment. “Having their SS payments deposited electronically would simply add to their confusion and problems in taking care of their own finances.”

“I have tried direct deposit and it was not to my liking,” said another comment cited in the letter.” I have my way of banking and it is too confusing to have my check direct deposited...I much prefer to get a paper check as has been the easiest way for me. Many of us older people do not understand and get confused by this paperless society...Let’s keep it a choice to receive a check.......”