Banks Improperly Garnishing Social Security Deposits

Administration’s Office of the Inspector General.

The inspector general found that some financial institutions are apparently violating federal law by garnishing accounts that receive electronic deposits of old age, survivors and disability insurance, and/or supplemental security income payments. These funds are supposed to be protected from creditors except under certain conditions.

From today’s Washington Post: “Millions of beneficiaries rely on Social Security benefits as their only source of income for basic needs such as housing and food,” the inspector general’s report says. “When a creditor’s garnishment order is enforced and these federal funds withheld, the lives of a vulnerable segment of the population are placed at risk.”

Last summer, Sens. Herb Kohl (D-Wis.), Max Baucus (D-Mont.) and Claire McCaskill (D-Mo.) asked the inspector general to investigate what they thought was a widespread practice of improperly deducting service fees and garnishments from beneficiaries’ direct-deposit accounts. See full story:

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