It came as an unpleasant surprise to Jennifer Yick when a business declined her Bank of America debit card with her unemployment benefits. The San Francisco resident knew she had more than $ 400 in her bank account.
She logged into the bank’s website and saw four high DoorDash fees – even though she had never used the grocery delivery service.
“I felt like a fool,” she said. “They just drained it.”
Then she went on a long search – “the story of endless phone calls, hours on hold,” she said – to contact Bank of America about the theft.
Numerous unemployed people share similar stories about how they hijacked their unemployment benefits from their Bank of America debit card accounts and then struggled with the bank to get their money back. A major class action lawsuit against Bank of America filed Thursday in the U.S. District Court in San Francisco aims for immediate changes to help those who lose money, such as making it easier to report theft and not freezing accounts.
“This is a disaster for thousands of unemployed Californians who lost their lone lifeline in this pandemic,” said Brian Danitz, an attorney for Burlingame’s Cotchett, Pitre & McCarthy who is serving as co-lead counsel on the case and consolidating nine previous lawsuits .
Bank of America was hired to provide the debit cards by the California Department of Unemployment Development, which manages unemployment. More than 9 million have been spent since the pandemic began.
California EDD: Information and Resources
The bank said in a statement that it worked hard to “prevent criminals from getting money and ensure that legitimate beneficiaries get their benefits”.
“We have added thousands of agents to answer calls and investigate claims for the areas of the program for which we are responsible. As a result, our average call waiting time has dropped dramatically,” said bank spokesman William Halldin. “When fraudulent transactions take place on advantage cards, we review these claims and return money to legitimate recipients.”
Faiz Ahmad, managing director of Bank of America and head of global transaction services, told lawmakers in January that the bank lost hundreds of millions of dollars to the California EDD contract, both in fraud losses and “the cost of performing the contract.” at the highest level as far as possible. “
Bank officials would like to emphasize that most of the unemployment fraud has been committed by criminals who have submitted false jobless claims using stolen or forged identities. This scam, which the state said totals at least $ 11 billion, is a separate topic and not tied to Bank of America.
However, the incidents of legitimate claimants whose money has been stolen from their cards are specifically covered by the bank’s agreement with California EDD. The contract states that applicants will not be held liable if their money is stolen. The lawsuit states that the bank violated that provision.
Lawmakers say it has heard of thousands of voters who have had EDD funds stolen. The bank highlighted the extent of the fraud in a letter to MP Wendy Carrillo from D-Los Angeles in February.
“Since the pandemic began, we have refunded cardholders hundreds of millions of dollars for claims that may have resulted in an unauthorized transaction or card fraud,” wrote Brian Putler, director of government relations for the bank in California. “Monthly claims (transaction fraud) rose from around a thousand claims per month to tens of thousands at the end of last year.”
Danitz said the bank often freezes accounts whenever fraud is reported. Even if victims are given a replacement card, they will not be able to access any remaining funds or future benefits.
“Many EDD debit card holders who are victims of third party fraud and turn to the bank for help are suddenly indefinitely deprived of all of their EDD benefits and treated as if they were the criminals “, it says in the lawsuit.
Both EDD and Bank of America said they are working on streamlining identity verification to get accounts cleared as soon as possible if fraud is suspected. People with debit card problems should contact the bank at 1-866-692-9374, the number on the back of the cards.
The lawsuit alleges that the bank left the door open to thieves by not adding a security chip to the EDD debit cards. This leaves the cards vulnerable to devices called credit card skimmers, which criminals install on legitimate card readers in places like ATMs and gas pumps. The devices collect card information from the magnetic stripes.
In Yick’s case, for example, she bought gasoline with her card the day before the DoorDash charges appeared on her account. When she filed a police report, they believed it was likely that scammers were gaining access to her account.
“We have many unanswered questions about what Bank of America has been doing to prevent, investigate and combat the fraud,” said David Chiu, Rep. Of San Francisco D-San Francisco. “Why wasn’t that part of those debit cards when anti-fraud technology became the industry standard years ago? EDD recipients were second class citizens when it came to anti-fraud technologies. “
Bank of America blamed EDD for the lack of chip technology. At a gathering hearing in January, bank officials said the agency had requested cards with magnetic stripes.
“Neither the 2010 nor 2016 contracts required chip-enabled cards, but we are currently working with BofA to have chip cards in the near future,” EDD said in an email.
Some cardholders whose money was stolen said they never used the debit cards, increasing the chances of the bank itself being hacked.
“This is a big bank and they should know how to do it without getting ripped off people and (criminals) figure out how to access those cards,” said Mary Alexander, a San lawyer implicated in the case Francisco. “You’ve known since at least 2008 that you put chips in these cards.”
San Francisco-based Frank Jaworski actually discovered his card was hijacked in real time, but still couldn’t get Bank of America to act. The bartender had a lot of credit in his unemployed account because he had just received benefits for several weeks.
After the card was declined twice, he tried to access the website and found that his login and password had been changed. An hour’s phone call connected him to a bank agent who said $ 3,480 – pretty much all of his money in the world – was about to be transferred to another bank.
“I insisted that I did not make this transfer and that it should be flagged as fraudulent and not let through,” he said. “The rep said they couldn’t stop it.” Neither that representative nor three others could help him change his login and password for the website, he said.
The next day, Jaworski went to a Bank of America branch in person, but was unable to enter as it had COVID capacity, and then tried to call again – again. (The bank said their branches cannot handle debit card issues.)
After being banned from his account for days, he received a replacement card in the mail, changed his login and found that his balance was a whopping 61 cents.
“I went through all of my purchases and nothing left,” he said in March while still trying to get his money back. “My bills are due.”
After two nerve-wracking weeks, the bank restored his lost money.
“It was a tremendous relief, but also a convenient, almost hectic trip to the BofA EDD website to initiate a transfer of every remaining penny to my Patelco credit union account,” he said.
He’s now set up his account to automatically transfer unemployment benefits to his credit union account and plans to run frequent manual checks.
Yick still hasn’t got her money back. She has returned to work as an Airbnb property manager and is fortunate that she is not as desperate for money as many others.
Still, she’s angry.
“It’s like I never existed,” she said. “I want accountability. I want the bank to be strengthened. “
Carolyn Said is a contributor to the San Francisco Chronicle. Email: csaid@sfchronicle.com Twitter: @csaid
