Fraudsters have made away with $2bn from the California Employment Development Department (EDD), one of the largest departments in America’s most populous state.
The EDD administers the Unemployment Insurance and State Disability Insurance programmes. It audits and collects payroll taxes and maintains employment records for millions of California workers.
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Bank of America, which contracts with EDD to distribute unemployment benefits, said in a statement:
“Our assessment is that there is activity consistent with fraud in those accounts on the order of approximately $2 billion.
“We also have detailed instances in which criminals not only withdrew initial funds provided by the State but sought and received additional ‘temporary’ credit from Bank of America.”
Customers got claims denied
Customers who attempted to access that accounts at Bank of America, got a message of insufficient funds.
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By GlobalDataConfused customers who called EDD waited for hours before their calls were answered, only to be told the contact the bank.
Then customers received a letter from Bank of America that read, in part:
“Your claim has been closed because we believe the account or the claim have been the subject of fraud … any related reimbursement of fees, has been or will be debited from your account.”
BoA now says customers can appeal bank’s decision
The letter denying claims was sent out to a number of Bank of America fraud victims.
“The bank is saying, ‘Oh, well there’s nothing we can do,’ and then EDD is saying, ‘Well, you’ve got to talk to the bank,’” one distraught customer said.
Bank of America now says it is adding more staff to review the claims and that affected customers will be able to appeal the bank’s decision on their claims.
