We review the district court’s decision that appellants, the Secretaries of Health and Human Services and of the Treasury (“the government”), acted unlawfully in recouping social security benefits erroneously deposited by electronic fund transfer (“EFT”) into bank accounts held by appel-lees after the deaths of their husbands.

Facts

The three named plaintiffs, Berdie Thomas, Joy Nutter and Inez Poison, are widows whose husbands were receiving social security benefits at the time of their deaths. Pursuant to procedures established by the Social Security Administration (“SSA”) and the Department of the Treasury (“Treasury”), the recipients’ monthly social security benefits were paid directly into their bank accounts by EFT.

Upon the deaths of their husbands, each widow promptly notified SSA, closed the joint bank account she had shared with her husband, and requested that SSA deposit her own benefits into a new account. In each case, SSA failed to respond promptly to the notification and continued to pay benefits to the deceased husband. In Thomas’ case, her own benefits, as well as those erroneously certified to her husband, were deposited into a closed joint account for five months after his death. The bank periodically allowed her to transfer funds from the closed account to her new account.

In Nutter’s case, her own benefits went directly into her new account, while her husband’s benefits continued to be deposited in a joint account that was supposedly closed. Apparently on its own initiative, the bank transferred the funds into Nutter’s new account. In Poison’s case, her husband’s benefits continued to be paid into a closed joint account (from which Poison eventually withdrew the funds) for several months after his death.

Treasury sent a Notice of Accountability to each of plaintiffs’ banks, demanding return of payments erroneously certified to their husbands. Treasury did not notify the plaintiffs or inform them of the amount it claimed from their accounts.

Thomas’ bank withdrew $1,389.05, the total amount in the account, and returned it to Treasury. SSA then demanded that Thomas repay the remaining $222.45. Nutter’s bank debited her new account and returned to Treasury the entire amount demanded, $463.40, leaving the account overdrawn by $235.10. The bank then made up the difference by taking part of Nutter’s April 1981 widow’s benefits.

Because there were no funds in Poison’s account when Treasury sent the Notice of Accountability, SSA demanded $1,494.90 from her directly. Poison initially agreed to a monthly deduction of $20.00 from her widow’s benefits, but SSA advised her that $97.50 per month would be withheld. Poison then withdrew her consent for voluntary repayment and SSA made no further effort to recover the balance.

Section 204(b) of the Social Security Act, 42 U.S.C. § 404 (b), provides that “[i]n any case in which more than the correct amount of payment has been made, there shall be no adjustment of payments to, or recovery by the United States from, any *732 person who is without fault if such adjustment or recovery would defeat the purpose of this subchapter or would be against equity or good conscience.” Pursuant to regulations, SSA must notify an individual who has been overpaid that he may request waiver, and also provide him procedural protections, including a hearing. 20 C.F.R. §§ 404.502 (a), 404.900 et seq.

Each of the widows requested SSA to waive recoupment of the funds. SSA refused, taking the position that the waiver provisions, and the concomitant right to notice and hearing, do not apply to these payments because they were erroneous payments rather than overpayments. In the government’s view, the term overpayment only applies to funds paid to a designated beneficiary in excess of the amount due him. When the money is paid to someone other than the designated beneficiary — here the beneficiary’s widow — it is not an overpayment, the government contends, and therefore not subject to waiver of recoupment under 42 U.S.C. § 404 (b).

Proceedings Below

Plaintiffs filed suit in the district court, claiming that the recovery procedures violated their constitutional right to due process and equal protection, as well as the statutory rights under 42 U.S.C. § 404 (which specifies procedures for recovering overpayments) and § 407 (which exempts Social Security benefits from “execution, levy, attachment, garnishment, or other legal process ... ”). Plaintiffs did not claim they were entitled to the funds, but contended that they had a right to seek waiver of recovery under 42 U.S.C. § 404 (b), and were also entitled to notice and hearing under the SSA regulations and the due process clause.

The district court initially granted defendants’ motion for summary judgment. The court found that the banks had not been authorized by the government to credit the plaintiffs’ accounts with the erroneous payments or to withdraw the funds. However, the court believed a cause of action might lie against the banks under 42 U.S.C. § 407 and allowed plaintiffs thirty days to amend their complaint.

Upon consideration of the amended complaint, the district court vacated its prior ruling and granted plaintiffs’ motion for summary judgment. Finding that the purposes of the Social Security Act were best served by construing the payments made after the death of the beneficiaries as over-payments rather than erroneous payments, the court held that the government could not recoup funds out of appellees’ accounts without first giving them an opportunity to apply for waiver of recoupment pursuant to 42 U.S.C. § 404 (b) and 20 C.F.R. § 404 .-502(a). The court also held that the widows had a property interest in their bank accounts and that due process required that they be allowed to contest the government’s claim before their bank accounts were debited. However, the court found that the debiting constituted state action only against Thomas, because in the other cases, the banks debited the accounts on their own initiative and pursuant to contracts with Nutter and Poison.

The court also certified a class “consisting of all California residents who have had or will have their bank accounts debited or their social security benefits reduced by defendants’ actions to recover Title II benefits certified to deceased beneficiaries, where defendants fail to provide prior notice of the overpayment or an opportunity for a hearing regarding the amount of overpayment, waiver of recovery, and repayment in installments.” Thomas v. Secretary of Health and Human Serv., No. C 81-2485 SW, slip op. at 17-18 (N.D.Cal., Sept. 14, 1983). The court later granted plaintiffs $24,900 in attorney’s fees under the Equal Access to Justice Act on the ground that the government’s position had not been substantially justified. Finally, the court permanently enjoined the government from recovering EFT payments to deceased beneficiaries without giving joint account holders prior notice and providing an administrative forum to challenge the overpayment determination and to seek a waiver of recovery. Soon after entry of the permanent injunction, defendants *733 ceased efforts to recover erroneous social security benefit payments in California.

Appellants’ Contentions

The government contends that the district court erred in holding that the EFT payments to appellants’ bank accounts constitute overpayments, which entitle them to request waiver of recoupment, as opposed to erroneous payments, which give them no such right. The government also argues that the widows have no property interest in the erroneously made payments and therefore no due process right to notice and hearing before the government tries to recoup the funds. The government also takes issue with the district court’s orders certifying the class and awarding attorney’s fees.

Discussion

This case is squarely controlled by Powderly v. Schweiker, 704 F.2d 1092 (9th Cir.1983), which compels reversal of the district court’s decision on the first two grounds advanced by appellants, rendering moot the other issues presented.

A. Waiver of recoupment

As noted, the district court determined that the payments made to the deceased husbands were overpayments and therefore subject to waiver of recoupment pursuant to 42 U.S.C. § 404 (b). The district court rejected the government’s contention that only excessive payments made to designated beneficiaries are overpayments, and that payments made to deceased beneficiaries are erroneous payments not covered by the waiver provision. In so doing, the district court incorrectly applied our ruling in Powderly .

Powderly , like this case, was brought by a widow challenging the government’s re-coupment procedures for payments erroneously made to her deceased husband. Like appellees here, Powderly claimed that the payments in question constituted over-payments and that she was therefore entitled to procedural protections pursuant to 42 U.S.C. § 404 (a) & (b). See Powderly, 704 F.2d at 1095-96 . The court held that “the overpayment waiver provisions of § 404(b), supra, are intended to benefit only designated payees who, through no fault of their own, have received more benefits than those to which they are entitled.” Id. at 1096. Because the widow Powderly was not the designated payee — her deceased husband was — the court held that the payment in question was not an overpayment but an erroneous payment and she was not entitled to the waiver provisions of section 404(b).

The only material difference between this case and Powderly is that Powderly involved a check made payable to the deceased husband and cashed by the widow upon an improper endorsement, rather than an EFT payment electronically transmitted into the widow’s account. Id. at 1094 . Appellees seize upon this difference to distinguish Powderly . Under the reasoning of Powderly , however, the manner in which the payment was made is not material to whether something is an overpayment or an erroneous payment. That distinction turns upon whether or not the payment was received by the designated payee or by someone else. In both Powderly and this case, the designated payee was the deceased husband and the money was received by his widow. Once this fact is accepted as dispositive, as the Powderly court did, it follows that the payments here were erroneous payments not over-payments. 1

Appellees also point to language in Powderly suggesting that the widow acted wrongfully in cashing the check made payable to her husband, and argue that we should reach a different result in this case *734 because no such misconduct occurred. The widow’s conduct was not, however, material to the court’s analysis in Powderly . 2 Nor does it make sense that it would be. Whether the recipient acted wrongfully only becomes relevant when there has been an overpayment, because only a “person who is without fault” is entitled to waiver. 42 U.S.C. § 404 (b).

On the basis of Powderly , we hold that the payments at issue here were erroneous payments and not overpayments, and that appellees were therefore not entitled to waiver under section 404(b).

B. Denial of Due Process

The district court also held that the widows had been denied due process when funds were removed from their accounts by EFT. Once again, however, Powderly squarely addressed the question and reached a contrary conclusion, one that is binding on us here.

The widow in Powderly made the identical argument raised by appellants here and the court rejected it, holding that “[appellant has not shown that she has a protected property interest in the funds.” Powderly, 704 F.2d at 1097 . The court noted that “[property interests do not arise whenever ‘an individual has an abstract need or desire for,’ or ‘unilateral expectation of,’ a benefit.” Id., citing Board of Regents v. Roth, 408 U.S. 564, 577 , 92 S.Ct. 2701, 2709 , 33 L.Ed.2d 548 (1972). Noting further that the widow was not claiming any threat to her own social security benefits, the court concluded as follows:

Powderly, 704 F.2d at 1097 . The court also dismissed as “groundless” Powderly’s claim to “a property interest by reason of her own bank account.” Id.

Appellees’ claims, and the district court’s ruling that sustained them, cannot survive scrutiny in light of Powderly . We therefore reverse on this issue as well.

Conclusion

Having determined that appellees are not entitled to recover on their statutory and constitutional claims, we need not reach appellants’ other claims involving the propriety of class certification and the award of attorney’s fees. We therefore reverse the district court’s judgment and vacate its orders certifying the plaintiff class, enjoining the government from recovering erroneous payments and awarding attorney’s fees against the government.

. Congress has since amended sections 204(a) and 1631(b) of the Social Security Act to clarify the status of payments made on behalf of deceased individuals by direct deposit into accounts shared with another person. Under the new regulations, these are treated as "payment[s] of more than the correct amount to such other person.” Consolidated Omnibus Budget Reconciliation Act of 1985, Pub.L. No. 99-272 § 12113 , 1986 U.S.Code Cong. & Ad. News (100 Stat.) 288 (to be codified at 42 U.S.C. §§ 204 (a) and 1631(b)).

. As a matter of fact, the court noted her explanation that she cashed the check on instructions from SSA. 704 F.2d at 1094 .