SAN FRANCISCO (KPIX) – KPIX was the first to expose how fraudsters are stealing from hundreds of thousands of unemployment debit cards. Since then, many more people have emailed us with stories of scammers wiping out their Bank of America EDD accounts.
Many people receive their unemployment money through a Bank of America debit card. Somehow the fraudsters are able to duplicate your card and your pin and then drain your account in cash, from an ATM miles away from where you live.
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Fred Ellingson is on hold again with Bank of America, trying to get his missing unemployment money back. “I got paid and then the next morning all the money was gone,” said Ellingson.
He says back in September fraudsters stole all the money he had on his Bank of America card, taking it out in cash from an ATM in Southern California, far away from his Bay Area home.
“Five-hundred and fifty-three dollars, I mean that’s nothing compared to some people. I’ve seen thousands taken out. But whether it’s a dollar or $10,000 it’s your money, you know!” said Ellingson.
KPIX talked to more than a dozen people that have lost thousands of dollars, money they all told us they desperately need after losing their jobs in the pandemic.
“It was the little bit of money that I did have left, that I was saving, it’s all that I have,” said Tatiana Solorzano.
Making matters worse, victims tell us they received letters from Bank of America just days after filing, saying their claim was closed “because we believe the account or the claim have been the subject of fraud.”
After we gave their names to Bank of America, seven people got their money back. It turns out they’re the lucky ones because a spokesperson for the bank tells us a “closed” claim actually means it’s “denied.” To fight that, you would have to get on the phone again, which can take hours, and ask for a review.
“I can’t really believe that Bank of America would not be able to handle this more effectively than it has done, and the very fact that there’s 350,000 people who may be subject to this fraud — and this is big time fraud,” said Linda Sherry with Consumer Action.READ MORE: 49ers Get It Done in Dallas and The Faithful Rejoice
Sherry says the long hold times trying to get through to Bank of America to file the claim in the first place are unacceptable.
“This is all very cut and dry in the sense of what the consumer is owed. The bank would be very wise to create some sort of online portal for reporting the fraud, which would also give the consumer the certainty that they reported this on a certain day, a certain time and sort of something to hang their hat on. Basically, that would be the best way to proceed here,” said Sherry.
“It’s infuriating, and it’s heartbreaking,” said Assemblyman David Chiu, who has been a vocal critic of the state’s Employment Development Department. Chiu says EDD and Bank of America have not been transparent with the public or with lawmakers in Sacramento.
“We deserve answers immediately from EDD and Bank of America leadership as to what’s happening here,” said Chiu.
The Assemblyman told KPIX if says if he doesn’t get answers soon he will take legislative action.
“The fact that these cards didn’t have the appropriate anti-fraud technologies and the typical chip technologies that all of us use in every other context is just not acceptable. And we need to hold both EDD and Bank of America accountable for what is happening right now,” said Chiu.
We asked Bank of America why the EDD cards don’t have chips. The bank referred us to EDD. Then, EDD told us providing chip technology is a rather new offering, that is not included in its current contract with Bank of America. The contract is set to expire next July and EDD says it will then be reviewing all options.
Statement from Bank of America:
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Spokesperson Bill Halldin:
EDD and Bank of America are working closely together to fight fraud. We are also working closely together to identify and unfreeze any legitimate cardholder accounts as soon as possible.
Since the pandemic, we have added significant resources to assist with our debit card programs. Those resources include additional call center staffing, which we continually review for service levels and adjust accordingly.
We encourage cardholders who have questions about their account to reach out to our contact center and ask for a review.
Statement from Employment Development Department:
Spokesperson Loree Levy
This is an unprecedented time for benefit fraud activity. Providing chip technology is a rather new offering and was not included in the current contract with Bank of America to provide debit card services for Unemployment Insurance (UI) claimants. That contract is set to expire in July 2021 and the EDD will be reviewing all options available when we
solicit new proposals.
We have no evidence of any data breaches here at EDD. Rather, as you mentioned in your story, there are scammers at work getting personal identifying information through the dark web and other sources. It’s unfortunate, but such offenders do tend to come out of the woodwork during crisis periods. Sometimes you hear of them preying upon wildfire victims for example, or in cases like benefit fraud in the unemployment insurance program, attacking the emergency measures taken by the federal government and states to get additional funds into the hands of jobless workers as quickly as possible. Bank of America
is the financial institution for California’s EDD and sister agencies for a few other states in providing benefits through a debit card meant to provide greater ease for the benefit claimants.
The ID.me identity verification tool was added to the New Claim Application Process and is definitely helping us mitigate benefit fraud moving forward. Unfortunately there is work involved in resolving prior issues created by these scammers. As we said in our news release last week, there are several different scenarios at play. The ones you mention in your story unfortunately deal with stolen funds by hackers and only Bank of America can assist in resolving that issue. But if a scammer filed unemployment claims using someone else’s address or identity, the EDD needs to sort out who rightly belongs with that personal identifying information. The priority is to confirm the legitimate claimant involved, if there is one, and request B of A to unfreeze accounts for verified claimants as quickly as possible – while shutting down claims we cannot verify. A claimant’s status may show “pending” while we complete this work.