![]() “$32 billion is a steep price to pay, but the EDD is finally making a lot of positive changes. If these had been in place in 2020, along with all of these changes coming underway through EDDNext, so, so many fraudsters would have been stopped. But since not everyone has a bank account, these debit cards go out, but with a lot of added security measures on them. With that, it is a lot easier to combat fraud. ![]() Once direct deposit is up at the EDD, most people will go for that based on the figures in other states. “And that’s why all these changes are being made. A lot of things went wrong all at once, and people took advantage of it. Bank of America messed up by having debit cards go out that couldn’t protect against fraudsters. They also were pretty antiquated in terms of how people filed and how fraud was detected. “The EDD did not have a system set up for such a high number of claimants and approved so many so fast to try and keep up. “Everyone messed up,” explained Linda Ballard, a Los Angeles-based accountant who has helped many people file for unemployment claims during the COVID-19 pandemic and recession afterwards, to the Globe on Friday. This is all part of the EDDNext program, which while making claims processing easier and faster, will also drastically increase protection against fraud. In addition to the provider switchover, the EDD added that a direct deposit option will be implemented later this year, with the EDD to pay Money Network around $32.3 million over the next five years to cover the costs of direct deposit transactions alone. This led to the debit card changeover officially happening on Friday. The company, which proved itself by sending the Middle Class Tax Refund out in late 2022, won the bid, with the transition between BofA and Money Network starting last year. Needing a new partner for benefit payments, the EDD turned to Money Network. When fraudulent transactions occur on benefit cards, we review those claims and restore money to legitimate recipients.” Bank of America – Money Network switchoverĭespite this, Bank of America quickly decided to get out of providing unemployment benefits, because of their part in the $32 billion in fraud and giving out outdated cards with no fraud prevention chips. Task forces soon recommended not only cards with fraud prevention chips, but also cards with tap to pay technology and the option for direct deposits to help combat fraud.īank of America, while also struggling to combat the fraud, said that “The vast majority of unemployment fraud is committed by those filing false applications. There, they found that the high number of BofA cards issued did not have fraud prevention chips in them, allowing for so many fraudsters to receive them during the pandemic. Investigations into the fraud were launched, with Governor Gavin Newsom launching his own investigation. ![]() By the time anti-fraud measures were firmly in place and that all claims could be thoroughly checked, the amount had climbed to $32 billion. In January 2021, California Labor and Workforce Development Agency Secretary Julie Su said that the number of fraudulent claims was at S11.4 billion. The EDD approved so many requests, even lifting their own anti-fraud measures. During the COVID-19 pandemic, the EDD was slammed with a record number of requests for unemployment following the shutdown of many businesses in March 2020. The switchover from BofA has been in the process for years, dating back to the COVID-19 pandemic. “With Money Network, customers get the benefits of embedded microchips and state-of-the-art encryption for making contactless payments when using that card,” said EDD Deputy Director Loree Levy in an announcement on Friday. Customers will need to transfer any remaining balance on their debit cards to a different account or request a check for the funds from BofA by that date. However Apwill be the last day that claimants will be able to use the old cards. The Employment Development Department officially switched over from Bank of America to Money Network for unemployment, disability, and Paid Family Leave debit card payments, following years of issues with BofA issued cards.Īccording to the EDD, old Bank of America EDD Debit Cards will continue to work for now.
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