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Bank of America New Jersey LWD Debit Cards, Accounts Defrauded Class Action

In 2020, millions of Americans lost their jobs and had to apply for unemployment benefits. In New Jersey, the Department of Labor & Workforce (LWD) did not pay these benefits directly to individuals. Instead, it contracted with Bank of America, NA to distribute the benefits through Bank of America-issued, Bank of America-administered prepaid debit cards that were linked to individual accounts. The complaint for this class action alleges that the bank did not take adequate care to protect individuals’ funds and allowed third parties to fraudulently gain access to them.

The Class for this action is all persons who were Bank of America LWD debit cardholders at any time between January 1, 2020 and the present, and whose eligibility for benefits LWD has not revoked for failure to establish valid identity.

Seven subclasses have been defined, including a Claim Denial Subclass, the Untimely Investigation Subclass, the Credit Rescission Subclass, the Account Freeze Subclass, the Account Block Subclass, the Security Breach Subclass, and the EMV Chip Subclass.

The complaint alleges that, “although the Bank was legally required to take necessary and reasonable steps to protect [unemployment recipients’] LWD Debit Cards and Accounts from fraudulent access by third parties, the Bank failed to do so and indeed treated these Cards and Accounts with less care than it affords its regular consumer debit and credit cardholders.”

How so? The complaint claims that the LWD debit cards were made without the industry-standard EMV chip technology that it uses for its regular customers’ debit and credit cards. This technology purportedly helps to prevent fraud. “Instead,” the complaint alleges, “for its government benefits customers, the Bank chose to issue debit card with only outdated magnetic stripe technology, which makes those cards far more susceptible to skimming, cloning, and other schemes that have allowed third parties to fraudulently use and access” the LWD debit cards and accounts.

In addition, the complaint alleges that the bank did not take reasonable steps to protect the LWD recipients’ personal and financial information: “The Bank’s systematically lax security practices enabled unauthorized persons to access [unemployment recipients’] personal and financial information and to make fraudulent, unauthorized transactions” involving their LWD debit cards and accounts.

Furthermore, it did not have systems and measures that permitted “prompt and effective identification of fraud…, prompt submission of fraud claims…, provisional access to already-approved benefits during the course of the Bank’s investigations of fraud claims, prompt and accurate resolution of those claims, and prompt reimbursement of funds stolen” from the accounts.

Recipients had to spend hours on the telephone attempting to make their claims, the complaint alleges, and when they did get through, it says, the bank then “den[ied] their fraud claims without investigation or explanation and freezing their Accounts indefinitely…”

This was done despite the bank’s purported “Zero Liability” policy.

Article Type: Lawsuit
Topic: Government Programs or Benefits

Most Recent Case Event

Bank of America New Jersey LWD Debit Cards, Accounts Defrauded Complaint

December 17, 2021

In 2020, millions of Americans lost their jobs and had to apply for unemployment benefits. In New Jersey, the Department of Labor & Workforce (LWD) did not pay these benefits directly to individuals. Instead, it contracted with Bank of America, NA to distribute the benefits through Bank of America-issued, Bank of America-administered prepaid debit cards that were linked to individual accounts. The complaint for this class action alleges that the bank did not take adequate care to protect individuals’ funds and allowed third parties to fraudulently gain access to them.

Bank of America New Jersey LWD Debit Cards, Accounts Defrauded Complaint

Case Event History

Bank of America New Jersey LWD Debit Cards, Accounts Defrauded Complaint

December 17, 2021

In 2020, millions of Americans lost their jobs and had to apply for unemployment benefits. In New Jersey, the Department of Labor & Workforce (LWD) did not pay these benefits directly to individuals. Instead, it contracted with Bank of America, NA to distribute the benefits through Bank of America-issued, Bank of America-administered prepaid debit cards that were linked to individual accounts. The complaint for this class action alleges that the bank did not take adequate care to protect individuals’ funds and allowed third parties to fraudulently gain access to them.

Bank of America New Jersey LWD Debit Cards, Accounts Defrauded Complaint
Tags: Covid-19 Related, Debit Card, Exposing Private Information, Fraud, Unemployment Insurance, Your Bank