California lawmakers, including some whose districts represent the Santa Clarita Valley, are asking Bank of America why money has been taken out of bank accounts with state unemployment benefit funds.
The bipartisan letter to Bank of America CEO Brian Moynihan included more than 50 signatures, of which state Sens. Scott Wilk, R-Santa Clarita and Henry Stern, D-Calabasas, and Assemblyman Tom Lackey, R-Palmdale, had signed.
Most residents who have applied for Unemployment Insurance or Pandemic Unemployment Assistance receive their weekly funds via debit cards issued by Bank of America under a contract with the California Employment Development Department.
In the letter, legislators say they have each been reached out by “an unprecedented number” of constituents asking them to intervene between EDD and the bank as to why funds have been removed from their accounts.
“Over the past six weeks, reportedly due to significant fraud, hundreds of thousands of UI, PUA and State Disability Insurance (SDI) recipients have had funds taken from their cards or their cards frozen, leaving them unable to access their benefits,” read the letter.
The letter then includes a series of questions for Bank of America, such as why it is taking funds and freezing cards, and why it does not immediately unfreeze cards after EDD clears fraud or verifies identities?
“We are preparing a detailed response to the letter,” William Halldin, a Bank of America spokesman, said Wednesday.
There are two areas where fraud has emerged amid the pandemic: the first and largest being unemployment benefits fraud by fraudulent applicants, which has prompted EDD to freeze nearly 350,000 cards about two months ago, and the second is scammers gaining access to already-issued cards, such as in “skimming” scams, according to Bank of America officials.
“Unfortunately, there has been billions of dollars of fraud during this pandemic in state unemployment programs, including California,” said Halldin. “We are working with the state and law enforcement to identify and take action to fight fraud, protect taxpayer money and ensure that legitimate recipients can access their benefits.”
In a prepared statement Wednesday, Wilk was critical of EDD and Gov. Gavin Newsom’s response to an unprecedented number of unemployment claims.
“This is another kick in the face to people worried about where their next meal will come from,” he said. “My office has been working 24/7 to help people but at some point there is only so much you can do when it is so screwed up.”