Bank of America California Unemployment Benefit Card Fraud Class Action

During the Covid-19 pandemic, many more people have relied on unemployment benefits. In California, these are handled by the Employment Development Department (EDD); Bank of America, NA (BOA) distributes the funds. However, this complaint alleges that BOA “is either unwilling or unable to stop criminals” from stealing unemployment funds from accounts. It also appears to be ineffective in responding to these thefts.

Two classes have been defined for this action.

• The Declaratory and Injunctive Relief Class is all persons who were lawfully issued a BOA debit card to access EDD benefits, from January 1, 2020 to the present.
• The Frozen Account Class is all persons who were lawfully issued a BOA debit card to access EDD benefits, from January 1, 2020 to the present, and who were denied access to all or part of the EDD benefits on deposit with BOA due to BOA freezing EDD accounts.

The plaintiff in this case, J. Michael Willrich, was out of work and applied for unemployment benefits. He received a BOA Visa Debit card with a magnetic stripe to access his benefits. The complaint alleges that “he was then the victim of unauthorized transactions on his card that debited $5,083.75 from his account.”

When BOA was proposing to extend its EDD contact in 2015, it made promises that the complaint quotes: that it “fully intend[s] to apply the most rigorous fraud detection procedures,” such as “employ[ing] the highest level of security and fraud safeguards…” It also promised to offer “fraud monitoring” for the cards and accounts and permit attempts to allow fraudulent transactions be “declined in real time.”

However, some users say their accounts experienced fraudulent transactions before they used the cards. The complaint alleges that this “could only have occurred if Bank of America failed to store or transfer EDD cardholder and account information in a secure manner.”

Another problem is the magnetic stripe technology. The complaint claims that magnetic stripes are “easily readable” so that the cards “are highly susceptible to fraud.” Nowadays, cards usually have EMV chips instead. BOA has offered such chips on new and reissued debit cards since 2014, but they do not offer it on EDD cards.

BOA also promised “zero liability” and “24/7” customer service. The complaint quotes BOA as saying that, if it must take a longer time to investigate (up to 45 days), “we will credit your Account within 10 business days for the amount you think is in error…” However, in some cases, no such funds have been credited; instead, accounts have been frozen.

However, in actual fact, the complaint alleges that BOA’s response has been evasive and ineffective. The complaint claims, “Over the course of months, Plaintiff [Willrich] repeatedly sought assistance through Bank of America’s fraud telephone hotline to no avail.

Article Type: Lawsuit
Topic: Government Programs or Benefits
Tags: Debit Card, Fraud, Payment of Promised Benefits or Subsidies, Refusal to Reimburse Fraudulent Transactions, Unemployment Insurance