The Social Security Administration's Inspector General concludes in a recent report that many banks are violating federal law by garnishing accounts that receive electronic deposits of Social Security benefits. The practice could imperil millions of low-income seniors and people with disabilities who rely on Social Security.

When people owe money to credit card companies and other types of lenders, the creditors often use garnishment as a way of gaining partial payment of the debt. In order to garnish a debtor's account, a creditor must go to court and obtain an order compelling the debtor's bank to relinquish a set portion of the account, often on a monthly basis in accordance with the debtor's deposits. However, federal law prohibits garnishment of accounts receiving direct deposit of Social Security benefits, except in very specific situations, such to collect child support or unpaid federal taxes.