Bank of America Unemployment Benefit Accounts Drained California Class Action

Bank of America, NA (BANA) has been administering benefits, such as unemployment insurance payments, for California’s Employment Development Department (EDD). An increasing number of people have been relying on these benefits recently due to the Covid-19 pandemic. The benefits are received as an EDD prepaid debit card, issued by BANA. Unfortunately, the complaint for this class action alleges that BANA has not taken adequate security measures, allowing criminals to empty accounts.

Plaintiff Jennifer Yick, who lives in San Francisco, lost her job during the Covid-19 pandemic. She was granted EDD benefits and given a card with a magnetic stripe. In December 2020, a supermarket rejected her card. Yick believed she had over $400 in the account, but when she checked it, she found only 70 cents left. The account had been drained via four Doordash transactions in Texas, New York, and Southern California.

BANA had not contacted her about these unusual, multi-city charges.

The complaint details Yick’s “maddening” attempts to get BANA to resolve the situation, but the bank has not given her any real assistance, the complaint claims.

BANA supposedly has a “Zero Liability” policy in such a situation, but the complaint says it has made an “ineffectual response” to the problem:

• Not answering EDD customer service telephone lines;
• Opening and then closing claims “so soon thereafter such that a full review could not have been done;”
• Adding funds and then removing them without notice to the cardholder;
• Not giving the cardholder provisional credit “as required by law;” and
• Freezing accounts that have not been raided or affected by the fraud.

The complaint says that EDD cannot right the situation because under its contract with BANA, the bank “is solely responsible for the administration of EDD benefits…”

According to the complaint, the fraud could have been avoided if BANA had followed industry standards for securing private financial information, and if it had issued cards with EMV chips. Instead, the EDD cards had “only outdated, fraud-prone ‘magnetic stripe’ technology.”

Among the counts are violation of the California Consumer Privacy Act, Reg of the Electronic Funds Transfer Act, breach of contract with the EDD cardholders, and performed its contract with EDD negligently, among other things.

Two classes have been defined for this action.

• The Declaratory and Injunctive Relief Class is all persons who were lawfully issued a Bank of America debit card for the purpose of accessing EDD benefits deposited into a Bank of America account, between January 1, 2020 and the present.
• The Frozen Account Class is the same as above, where the persons were denied access to all or part of the EDD benefits on deposit with Bank of America due to Bank of America freezing EDD accounts.

Article Type: Lawsuit
Topic: News, Privacy
Tags: Breach of Contract, EFTA, Your Privacy