Bank of America asked why they're draining EDD accounts, leaves questions unanswered

ByRenee Koury KGO logo
Thursday, December 3, 2020
Bank of America fails to give answers about drained EDD accounts
Fifty-nine California lawmakers demanded answers from as to why unemployment benefits were being drained of funds, but Bank of America missed their deadline to respond. And now thousands of unemployed workers are left without badly-needed benefits.

SAN FRANCISCO (KGO) -- 7 on Your Side reported, a group of 59 state lawmakers demanded to know why Bank of America is draining EDD bank accounts. The bank did not provide answers by a Tuesday deadline. And now thousands of unemployed workers are left without badly-needed benefits.

These workers all have one thing in common; they reported that thieves ran up charges on their EDD debit cards. Now the bank is using their benefits to pay it back. It's left many with no money to live on.

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"Oh my god, it's so stressful. I literally have no money." Javier Nuno of Kentfield was laid off from Applebee's when the pandemic hit. He's been receiving unemployment benefits but says somewhere in the world a thief was using his money too.

"All these random charges, the debitor was like Africa, West Africa, Europe. Weird charges; it just kept naming different countries," Nuno said.

Nuno reported the fraud to Bank of America and the bank gave him credits for those bogus charges.

"I thought my problems were over with everything taken care of...all of a sudden out of the blue...there's a like $5,000 debit," he said.

Turns out Bank of America later took away those credits, pulling the money right back out of Nuno's account.

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It left him with a negative balance. His account is now $5,000 in the red.

"They said, 'Oh you need to call EDD.' I called EDD -- 'You need to call the bank.' I tried the bank again, no answer, no answer," he said.

The bank promised to close his account and send him a new debit card.

He never got it.

And thieves kept running up charges.

"I'm over here waiting for my card, and the scammers are using the same old card that was supposedly closed. And I'm over here waiting and waiting and rationing every meal and rationing every cent that I have," said Nuno.

RELATED: 'People need help': As many as 1 in every 3 EDD claims is fraudulent, security firm says

Turns out the bank could not close his account because it had a negative balance.

His EDD benefits were now going to pay it off. He is still $2,000 in the red, and he's not alone.

"You took $16,000 where did it go?" Michael Conant of San Francisco found his account empty after the bank took back credits for fraud.

Same for Anthony Serafino of San Francisco. "$10,000 was missing...It's money I'm entitled to, it's not fair. "

Bank of America has been pulling funds out of EDD accounts of thousands of workers who reported fraud on their cards.

VIDEO:Woman watches via text as scammer drains EDD benefits

Identity theft is already a horrible crime. Now, scammers are stealing Californians' EDD accounts, draining them of their benefits while the victims watch helplessly.

Bank of America said it did receive the letter from 59 lawmakers demanding to know why it's draining funds. It did not provide answers as was requested by Tuesday.

A spokesperson said the bank is working with the EDD to fight rampant fraud and has flagged certain accounts due to suspicious activity.

Consumers will have to contact the bank to try to get their money back.

The workers say they already reported the hacks, and the bank is supposed to cover losses due to fraud.

State legislators want an explanation.

"Bank of America has not provided any answers as to why this is happening. There's a bit of finger-pointing going on and it's absolutely unacceptable. It's just another example of failure of our unemployment system during this pandemic and recession," said Assemblymember David Chiu (D - San Francisco) earlier this week.

RELATED: Here's how investigators caught inmates running EDD scam ring out of jail

"Why is Bank of America taking money away from legitimate workers who should be paid, and where is that money going? And we're not getting answers," said Assemblymember Jim Patterson (R - Fresno).

The letter from the lawmakers to CEO Brian Moynihan, reads in part: "Every legislative office in the state has experienced an unprecedented number of constituents" asking to resolve problems with EDD and Bank of America.

It also posed several questions meant to be answered by the Tuesday deadline. Among them:

  • "Why is Bank of America taking funds and freezing (debit) cards?"
  • "What needs to happen... to have the funds restored?"
  • "Has Bank of America had to pay penalties... due to fraud on its cards?"

Bank of America told 7 On Your side it would respond directly to legislators, but in general would say: "We are working with the state and law enforcement to identify and take action against fraudulent applicants, protect taxpayer money and ensure that legitimate applicants can access their benefits."

"This involves a contract between the state and the Bank of America and from my perspective we're going to have to revisit that contract because it is clearly failing the people of California," said Assemblymember Chiu.

VIDEO: Homeless mom and son finally receive EDD benefits

At long last, Shelby Hughes's EDD delayed and desperately-needed unemployment benefits came through -- but people all over California have also stepped in to offer support.

Assemblymember Chiu, who signed the letter, says workers are losing benefits when they need them most.

"They're having trouble putting food on the table or paying the rent... for the debit cards to lead to draining of funds is not acceptable," said Assemblymember Chiu.

"Here we are, the working people, we have very little income, need every single cent to ride this whole COVID... They don't know how much I depend on that money. They seem like they don't even care," said Nuno.

Lawmakers say the bank is unfairly lumping honest workers in with scammers as it tries to crack down on fraud. They want those funds restored to those who need them most. If this happens to you let 7 On Your Side know.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

Have a question for Michael and the 7 On Your Side team? Fill out the form HERE!

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