Federal judge orders Bank of America to provide more proof of fraud before freezing EDD accounts

[quaint]

KTLA

U.S. District Judge Vince Chhabria issued a preliminary injunction that was sought in a lawsuit by 15 jobless Californians who are among thousands who had their benefit debit cards frozen. Bank of America negotiated the terms of the order to prevent the unfreezing of debit cards on thousands of claims it or law enforcement has determined to be fraudulent.

“The court’s order provides substantial and immediate relief to hundreds of thousands of unemployed Californians,” said Brian Danitz, an attorney for unemployed people who sued the bank, in a statement. “The order prohibits the bank from freezing accounts based on a flawed fraud filter, requires the Bank to reopen unauthorized transaction claims it summarily denied, and requires the Bank to comply with the law by investigating those claims and providing provisional credit.”

Waaay late but hoping this will help.

[Cozmo]

1. What was BoA's reasoning for freezing them in the first place?

[quaint]

2. Massive identity fraud.

SACRAMENTO (CBS / AP) — Sophisticated hackers, identity thieves and overseas criminal rings stole over $11 billion in unemployment benefits from California last year, but the extent of the fraud might grow far larger: billions more in payments are under investigation.

California Labor Secretary Julie Su told reporters in a conference call Monday that of the $114 billion the state has paid in unemployment claims, about 10% — or $11.4 billion — have been confirmed as fraudulent.

Nearly all of the fraudulent claims were made through the federally supported Pandemic Unemployment Assistance program. The program was approved by Congress to provide unemployment benefits to people during the coronavirus pandemic who are usually ineligible to receive them, such as independent contractors. But, officials say, its broad eligibility requirements made it an easy target of criminals, including from Nigeria and Russia.

Apparently BofA decided to treat most EDD deposits as fraud.