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CBS13 Investigates EDD Backlog - Getting Answers From

SACRAMENTO (CBS13) — The number of backlogged unemployment claims is growing despite the Employment Development Department's new identity verification tool.

The system was supposed to decrease fraud and the EDD backlog by reducing manual identity verification and automatically verifying 90% of legitimate applicants.

Instead, the backlog of initial unemployment claims has nearly doubled in the last month from a low of under 200,000 in mid-November to more than 400,000 by mid-December.

According to EDD data, roughly 58% were automatically verified during's initial weeks in October.

So, are 90% of unemployment applications automatically being processed through now? EDD ignored requests for updated data, so we went to the source.'s CEO Blake Hall provided data that indicates they have automatically processed 87% of legitimate initial claims since October. An additional, roughly, 13% of processed claims required manual verification via video chat.

But Hall says more than one-third of the initial online claims they've processed in California have been fraudulent. He believes that is skewing the backlog numbers. "I think it's a lot of its fraud," Hall said.

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He estimates they've prevented more than 3.5 billion in fraudulent claims in just the past three months. is currently processing claims in 12 states and Hall says California accounts for 75% of all unemployment fraud they've uncovered nationwide.

It's important to note, only handles initial online claims in California. Continuing claims, frozen Bank of America accounts and claims submitted through the mail or the EDD call center are verified separately through the agency.

While EDD does not publicly identify the source of backlogged claims, Hall believes much of the backlog is due to claims submitted directly to EDD via phone and mail. He believes that's a sign fraudsters are shifting their tactics to avoid submitting applications through

But what about the growing number of complaints from legitimate applicants who cite long waits for an video chat after their documents are denied? From the Better Business Bureau website to social media posts, there have been a growing number of complaints.

"Up until Thanksgiving, we had never had a wait time on our video chat for more than 45 minutes," Hall said.

However, he acknowledges a perfect storm led to delays last month after the state of Arizona asked that the company rescreen all of the state's applicants at the same time that was working to stop four Nigerian cyber-attacks.

"The reason the Nigerians are trying to take us down is because we literally cut off tens of millions of dollars from organized crime," Hall said. "We got hit by four denial of service attacks out of Nigeria, that we stopped. We had 2.2 billion transactions come from Hong Kong and China in a single day."

Hall says they successfully stopped all the attacks and have added staff to compensate for the increased applicants. As of Monday, Hall said the average wait for a video chat was 17 minutes.

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