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California Lawmakers Grill Bank Of America Over Handling Of Massive EDD Bank Card Fraud

SAN FRANCISCO (KPIX) -- Lawmakers are turning up the spotlight on the massive Employment Development Department (EDD) and Bank of America problems relating to unemployment insurance benefits.

For the first time, Bank of America officials addressed the issues publicly in a budget subcommittee hearing.

Most of the focus centered on EDD and its massive backlog, but also the fraudulent transactions by criminals.

RELATED: KPIX EDD Fraud Special Section

For months, Bank of America has remained mostly silent addressing its EDD debit card holders, with crooks stealing cash from ATMS, and criminals emptying accounts online.

"We are dealing with something unprecedented, criminals are sitting on a cache of stolen identities for some time and waiting for an opportunity to jump," said Bill Fox of Bank of America.

"Wait times to call centers are one minute with the tail being between one and five minutes," said Faiz Ahmad, Managing Director of Transaction Services, Bank of America.

"What you said does not reflect the experience of constituents that have called my office. I feel like my staff should get reimbursed for time spent doing your job. We're not paid to do your job," said Assemblymember Phil Ting of San Francisco.

In the bigger picture of fraudulent claims, state officials admitted more than a quarter of claims paid out since the onset of the pandemic could be fraudulent, which would amount to more than $30 billion, several times more than initial estimates late last year.

"EDD hasn't gotten any upgrades in 10 years, rules and regulations, not for 18 years. This is a new day need. We have to shape up here. We need to do more education of people. We need to simplify the process," said EDD Director Rita Saenz, who started her position a few weeks ago.

The ongoing efforts by EDD and Bank of America to curb billions of dollars of fraud by freezing hundreds of thousands of accounts, and recently stopping payments to 1.4 million recipients, have led to legitimate claimants struggling to get benefits.

"She had her claim, and I had my claim and then the benefits stopped for both of us around the middle of December," said San Rafael resident Michael Probst.

He says they're having trouble getting answers from EDD after it asked to re-verify his identity, but says the agency hasn't clarified what's needed for her frozen account.

"Luckily, my wife and I aren't as desperate in such a difficult time as some people are so, we're getting by, but it would be nice if EDD could speed things up a bit," said Probst.

The state auditor also submitted a scathing report blasting EDD, saying the agency had "inefficient processes" and a "lack of advanced planning" to address the number of claims.

The agency has paid out more than $114 billion since March.

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