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Some Seniors Resist Electronic Social Security Payments

Comstock/Thinkstock(NEW YORK) -- Glenn Smallwood does not have a cellphone, computer or credit card.  Nor does he have a bank account.  And that’s exactly the way he likes it.

“I guess you could say I’m an old fuddy duddy,” Smallwood, 63, a semi-retired insurance salesman in Clearwater, Fla., told ABC News.  “I’m set in my ways.  I don’t want my money in a bank.  I keep my money in my pocket.”

So when Smallwood received a notice from the U.S. Treasury Department informing him that as of March 2013, his Social Security checks would be directly deposited into his bank account -- or he could enroll in the government’s Direct Express Debit MasterCard program -- he was decidedly unhappy.

“I don’t think the federal government has the right to tell me that I have to have a checking account or a debit card,” Smallwood said, adding that he cashes checks at Wal-Mart, pays his rent by money order and has no plans -- or desire -- to stop.

Smallwood lives in one of the nation’s 10 million households that are unbanked, according to figures from the Federal Deposit Insurance Corporation (FDIC).

While waivers are automatically granted for anyone who was 90 years old or older on May 1, 2011 -- as well as people living in remote locations or those who are mentally incapable of handling their own affairs -- Dick Gregg, the fiscal assistant secretary of the Treasury, acknowledged that these waivers are rare.

“Most individuals that receive checks will drive to a local bank to cash them and individuals with mental impairments will designate a representative payee that will sign up for electronic payment,” he said.

He added that the initiative to have all benefits payments made electronically will save an additional $1 billion in taxpayer money over 10 years.  It is also safer, faster and more reliable than receiving paper checks, which can be lost, stolen or delayed.

But John Runyan, executive director of Consumers for Paper Options, an advocacy group funded by “paper-based communications interests” -- which includes the Envelope Manufacturers Association, the American Forest & Paper Association and paper companies -- believes the mandate is unfair to seniors like Smallwood who don’t want to change.  

”Our goal is to get the federal government to recognize fully that there is certain type of information that should continue to be provided on paper if the consumer wants them, and that should be the consumer choice,” he told ABC News.

Copyright 2012 ABC News Radio

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