Last year, 15 unemployed Californians brought a lawsuit against Bank of America for freezing their unemployment benefit debit cards. U.S. District Judge Vince Chhabria ruled in favor of the plaintiffs and prohibited B of A from freezing unemployment debit card accounts that were flagged as fraudulent through their “automated fraud filter.” He also required Bank of America to:
- Reopen unauthorized transactions claims quickly denied
- Investigate denied claims lawfully
- Provide provisional credit
- Create a customer service line for people affected by fraud
In an order signed by District Judge Chhabria, he explained that “the hardship to the defendant from this injunction is outweighed by its benefits to the class members.” He continues, “What seems clear to me from the record is that Bank of America has been violating people’s rights by not doing a good enough job of responding to this crisis.”
The most recent EDD update
As of July 25th, the agency launched chip-enabled debit cards for claimants who:
- Are receiving EDD benefits for the first time
- Have cards expiring soon
- Need a replacement because it was lost, stolen, or damaged
They now have a dedicated division to call and speak with Bank of America fraud specialists for questions – 1-800-558-9226.
Why Did EDD Freeze Thousands of Unemployment Debit Cards?
In 2020, EDD began freezing unemployment debit cards due to suspected fraud. Debit cards have been frozen for a variety of reasons including a high volume of claims at the same address. EDD has said they have frozen over 350,000 debit cards. They are currently unsure how much these cards equate to in total but some fake cards have been revealed amounting to up to $20,000.
EDD is attempting to identify which of these cards are fraudulent and which are genuine to unfreeze access to funds and recover fraudulent funds as quickly as possible. Unemployment recipients who have had their accounts frozen are instructed to visit EDD’s website and follow instructions to provide verification of genuine eligibility. Doing so will renew access to their funds.
Read additional information from San Diego’s Local 10 News.
(KGTV) — Hundreds of thousands of unemployment debit cards in California have been frozen due to fraud, according to the state’s Employment Development Department.
The EDD says 350,000 debit cards have been frozen because of a variety of fraud indicators, including a high number of claims at a single address. It wasn’t clear how much the debit cards were worth, but law enforcement officials say they’ve uncovered fake cards amounting to $20,000 each, KABC reported. Now, unemployment fraud totals over $11 billion because of the lack of security systems in place to help prevent the fraud.
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“The Department’s top priority is to quickly verify the identity of any claimants in this group that may have been impacted by scammer attacks, while we work to shut down the potentially fraudulent claims,” the EDD said.”
Impacted EDD claimants who may have their cards frozen are advised to take the following action:
“Claimants who receive an email, text message, or mailed notice from EDD requesting them to provide identity verification documents should visit EDD’s website to log in or register for a UI Online account and upload the documents through the Document Upload feature. The EDD has implemented various methods to help expedite the verification process. Payments will be reestablished for claimants verified to be legitimate and accounting will be done to clear them from any connection to a possible fraudulent claim initiated in their name or involving their address.
For claimants who receive an email, text message, or mailed notice and need assistance in providing the identity documents, a new AskEDD dropdown menu has been implemented for them to provide contact information following these steps:
Select the category ‘Unemployment Insurance Benefits’
Select the sub-category of ‘Payments’
Select the topic “Frozen EDD Debit Card” and press Continue to provide contact and claim information.
For claimants who can’t access funds on their EDD Debit Card and have not received any messages from the EDD, it’s likely that Bank of America has frozen the card because of a suspected transaction, and EDD does not need to verify their identity. In these cases, claimants are advised to contact B of A at the number on the back of their card (1.866.692.9374). The EDD does not remove funds from a card and has no access to the transactions on the card for privacy reasons.
EDD says that more than 40 arrests have been made since August for fraud, including a rapper who boasted in a music video about committing unemployment benefits fraud.”
With the number of unemployment benefits skyrocketing in the past two years, EDD may send more businesses benefit audits to search for suspicious activity. Learn more about the various types of EDD benefit audits, and what to do if you receive a benefit audit in our article here.
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