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Bank of America Inattention to Fraud on EDD Accounts Class Action

California does not pay unemployment benefits directly. Instead, its Employment Development Department (EDD) has an exclusive contract with Bank of America, NA, which issues the benefits in the form of pre-paid debit cards. Unfortunately, criminals have stealing the benefits from these cards. The complaint for this class action alleges Bank of America is responsible for the thefts, because it issues the cards with magnetic stripes rather than EMV chips.

The class for this action is all persons in California who are or have been entitled to unemployment benefits during the statute of limitations period who are or will be threatened with injury arising from Bank of America’s wrongful actions, as described in the complaint.

The complaint quotes from a San Francisco CBS article telling the story of a man with three daughters and a disabled wife who went to withdraw money from his account only to find out someone had taken it. To file a claim with the bank, the article says, he waited on hold for seven hours. Two days after that, he got a letter from the bank saying that his claim had been closed. He appealed the decision, but a month and a half later, he was still waiting for results.

The complaint claims that Bank of America isn’t taking steps to compensate the people who were robbed or even giving them enough attention. It relays a quote from a Bank of America customer service representative as quoted in another article, as saying, “We’re actually no longer allowed to tell them [defrauded EDD cardholder] a timeframe, because we have no clue …. Every day, I talk to 30 people with the same story. I just pray for them after my shift, honestly.”

In its cardholder agreement, Bank of America claims to have a “Zero Tolerance policy” where fraud is involved. But the complaint details ways in which it is not responding adequately to EDD cardholders:

  • Not answering at the customer service numbers cardholders are supposed to call.
  • Opening claims and then closing them too fast to have investigated properly.
  • Crediting money to accounts and then debiting them with notice.
  • Not providing provisional credit to the defrauded cardholders.

The bank’s agreement with EDD specifies that it is to have control over the EDD program, the complaint says, so that EDD has no ability to intervene.

The primary problem, the complaint contends, is that the cards were issued with outdated, “fraud-prone” magnetic stripe technology, instead of EMV chips. Bank of America uses such chips in its regular customer debit cards, so it has the technology to do this. However, it costs more than magnetic striping, and the complaint alleges that the bank simply did not want to go to the expense for EDD cards, “in order to save money and increase its profits…”

The complaint claims the bank’s failings as failing to protect the benefits it administers from fraud, failing to detect fraud when it occurs, and failing to solve the problems the fraud causes people who are dependent on the benefits.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Bank of America Inattention to Fraud on EDD Accounts Complaint

February 25, 2021

California does not pay unemployment benefits directly. Instead, its Employment Development Department (EDD) has an exclusive contract with Bank of America, NA, which issues the benefits in the form of pre-paid debit cards. Unfortunately, criminals have stealing the benefits from these cards. The complaint for this class action alleges Bank of America is responsible for the thefts, because it issues the cards with magnetic stripes rather than EMV chips.

Bank of America Inattention to Fraud on EDD Accounts Complaint

Case Event History

Bank of America Inattention to Fraud on EDD Accounts Complaint

February 25, 2021

California does not pay unemployment benefits directly. Instead, its Employment Development Department (EDD) has an exclusive contract with Bank of America, NA, which issues the benefits in the form of pre-paid debit cards. Unfortunately, criminals have stealing the benefits from these cards. The complaint for this class action alleges Bank of America is responsible for the thefts, because it issues the cards with magnetic stripes rather than EMV chips.

Bank of America Inattention to Fraud on EDD Accounts Complaint
Tags: Debit Card, Fraud, Unauthorized Credit or Debit Card Charges, Your Bank