Should Social Security Eliminate Paper Checks?
By Sharon O’Brien, Senior Living Guide
Under a government plan announced earlier this year, Social Security beneficiaries and people who receive other federal benefits will no longer be able to get their payments by check. Starting in 2013, federal beneficiaries would only be able to receive payments by direct deposit to their bank accounts or by using a pre-paid debit card issued by the government.
Several consumer advocacy groups are putting pressure on the U.S. Treasury Department, objecting to the government’s paperless plan and saying that it would lead to abuses by creditors ranging from mainstream banks to payday lenders, who make short-term, high-interest loans to seniors. The Social Security Administration has even been depositing benefits directly into accounts controlled by storefront lenders, who pay themselves first before passing whatever is left on to Social Security recipients.