ALACHA Partners with Go Direct Campaign to Promote Direct Deposit of Social Security Payments

The Alabama ACH Association (ALACHA)has partnered with Go Direct, a national campaign sponsored by the U.S. Department of the Treasury and the Federal Reserve Bank, to encourage people who receive Social Security and Supplemental Security Income (SSI) to use direct deposit. The national campaign kicked off on Sept. 27 with commemorative events in Washington, D.C. and other major cities around the nation.

Go Direct is a great campaign for ALACHA and our members to be involved in because it benefits everyone involved.

For people who receive Social Security payments, direct deposit is simply the best way to get their payments because it eliminates the risk of lost or stolen checks, reduces fraud and gives them more control over their money.

For our member financial institutes and the financial services industry at large, direct deposit is a key weapon in minimizing check fraud losses. The most recent ABA Deposit Account Fraud Survey Report estimated that attempted check fraud at banks totaled $5.5 billion in 2003 with $677 million in actual dollar losses for financial institutes.

Direct deposit provides financial institutes with a great way to earn customer loyalty, since those who use direct deposit are less likely to change banking institutions. It also saves money spent on processing paper checks- money that goes straight to your financial institutes bottom line. ACH transactions save consumers, businesses and the government billions of dollars each year.

Unfortunately, recent analysis by the Treasury shows that only 75 percent of new Social Security recipients, the largest group to receive federal benefit payments, are signing up for direct deposit. This is down sharply from a high of 90 percent in the late 1990s. Unless the rate of direct deposit use increases, the costs associated with issuing federal benefit checks will balloon when baby boomers start retiring in 2008.

It's a fact that tellers are key influencers in encouraging customers to switch to direct deposit. That's why we encourage all of our members to take the simple step of training your tellers on ways to approach customers about direct deposit. The Go Direct campaign makes it easy with a step-by-step teller training guide. There's also a special section for financial institutions on the Go Direct Web site - www.godirect.org/Partners - that is a fantastic resource for campaign materials and suggestions for promoting Go Direct and the benefits of direct deposit to your customers.

ALACHA is pleased to join numerous other organizations around the country in partnering with Go Direct. We hope you will join us by supporting this important and beneficial campaign in your retail operation.

For more information about Go Direct, visit www.GoDirect.org (English) and www.DirectoASuCuenta.org (Spanish), or call (952) 346-6055 to learn about partnership and volunteer opportunities.