EDD logo. (Photo: edd.ca.gov)
EDD Switches Over To Money Network For Benefit Payments Following $32 Billion in Fraud
Department switches bank networks following $32 billion in fraudulent unemployment claims during pandemic
By Evan Symon, February 16, 2024 1:02 pm
The Employment Development Department officially switched over from Bank of America to Money Network for unemployment, disability, and Paid Family Leave debit card payments, following years of issues with BofA issued cards.
According to the EDD, old Bank of America EDD Debit Cards will continue to work for now. However April 15, 2024 will be the last day that claimants will be able to use the old cards. Customers will need to transfer any remaining balance on their debit cards to a different account or request a check for the funds from BofA by that date.
“With Money Network, customers get the benefits of embedded microchips and state-of-the-art encryption for making contactless payments when using that card,” said EDD Deputy Director Loree Levy in an announcement on Friday.
The switchover from BofA has been in the process for years, dating back to the COVID-19 pandemic. During the COVID-19 pandemic, the EDD was slammed with a record number of requests for unemployment following the shutdown of many businesses in March 2020. The EDD approved so many requests, even lifting their own anti-fraud measures. In January 2021, California Labor and Workforce Development Agency Secretary Julie Su said that the number of fraudulent claims was at S11.4 billion. By the time anti-fraud measures were firmly in place and that all claims could be thoroughly checked, the amount had climbed to $32 billion.
Investigations into the fraud were launched, with Governor Gavin Newsom launching his own investigation. There, they found that the high number of BofA cards issued did not have fraud prevention chips in them, allowing for so many fraudsters to receive them during the pandemic. Task forces soon recommended not only cards with fraud prevention chips, but also cards with tap to pay technology and the option for direct deposits to help combat fraud.
Bank of America, while also struggling to combat the fraud, said that “The vast majority of unemployment fraud is committed by those filing false applications. When fraudulent transactions occur on benefit cards, we review those claims and restore money to legitimate recipients.”
Bank of America – Money Network switchover
Despite this, Bank of America quickly decided to get out of providing unemployment benefits, because of their part in the $32 billion in fraud and giving out outdated cards with no fraud prevention chips. Needing a new partner for benefit payments, the EDD turned to Money Network. The company, which proved itself by sending the Middle Class Tax Refund out in late 2022, won the bid, with the transition between BofA and Money Network starting last year.
This led to the debit card changeover officially happening on Friday. In addition to the provider switchover, the EDD added that a direct deposit option will be implemented later this year, with the EDD to pay Money Network around $32.3 million over the next five years to cover the costs of direct deposit transactions alone. This is all part of the EDDNext program, which while making claims processing easier and faster, will also drastically increase protection against fraud.
“Everyone messed up,” explained Linda Ballard, a Los Angeles-based accountant who has helped many people file for unemployment claims during the COVID-19 pandemic and recession afterwards, to the Globe on Friday. “The EDD did not have a system set up for such a high number of claimants and approved so many so fast to try and keep up. They also were pretty antiquated in terms of how people filed and how fraud was detected. Bank of America messed up by having debit cards go out that couldn’t protect against fraudsters. A lot of things went wrong all at once, and people took advantage of it. And the state paid dearly.
“And that’s why all these changes are being made. Once direct deposit is up at the EDD, most people will go for that based on the figures in other states. With that, it is a lot easier to combat fraud. But since not everyone has a bank account, these debit cards go out, but with a lot of added security measures on them. If these had been in place in 2020, along with all of these changes coming underway through EDDNext, so, so many fraudsters would have been stopped.
“$32 billion is a steep price to pay, but the EDD is finally making a lot of positive changes. Rich or poor, people pay into the system and, if the worst happens, they have a financial cushion. They shouldn’t have to worry about people stealing much needed funds from them or people taking advantage of an agency designed to help people like this.
“These are positive changes, but it is important to not forget why these changes are happening either.”
Direct deposit options for unemployment benefits are due to be made available later this year.
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I don’t know how a “new bank” with a “new card” is going to prove that I am who I say I am, that I qualify for “unemployment”, and I am the one receiving the card and using the card
This will be another one of Newsom’s new “Tough on Crime” talking points when he runs for office.
No one was held accountable for the disappearance of $32 billion in taxpayer funds due to fraud? If there was any real justice, Newsom and his former Labor and his former Workforce Development Agency Secretary Julie Su would be hauled before tribunals for dereliction of duty. Instead Newsom is allowed to continue destroying the state while running for president and Julie Su is acting United States Secretary of Labor. They’re lawless like the rest of the criminal Democrat mafia?
Pretty crazy how only Democrats can “fail upwards” and essentially get promoted for COMPLETELY SCREWING UP…
And the Republicans can’t figure out how to point this out???
Are you freaking KIDDING???
The first big mistake was using Bank of America. Back in the 70’s when I started working, they were famous for fleecing their customers with excessive fees. Many people fled as quick as possible. Nations Bank of Charlotte acquired Bank of America in 1998 so the BofA of today isn’t even the original BofA. Good riddance.
Any reason why no one is talking about the rocky transition “launch” today? How many like me still have not received their new cards but got their payment disbursed to the new card and now cannot access those funds! How about a complete lack of foresight of an obvious risk and no mitigation plan in case of its occurrence? Why am I not being provided acces to a virtual card in the interim so I can still pay my bills? What idiot create the User Stories and Use Cases and missed this as a likely issue???
can they recruit more call center agents? I can imagine the job is stressful and the turn over might be high. But it should be absolutely unacceptable for a person to call and be told the maximum number of calls has been reached and then hung up on. spent 4 hours yesterday trying to get someone. Also I would love an explanation of how EDD unemployment has my employment records but EDD disability has no records of me paying into the system? I’ve worked since the12th grade and had my last job for 14years. Hope the revamp figures that out.
EDD went from bad to Worst when they chose MN-MONEY NETWORK. MN is ladened with issues. External transfers not going through, people not able to sign into their MN apps, etc. There are too many to list. It is utterly ridiculous. Who is going to be accountable for money network???
The move to “Money Network” has been the worst experience ever. The talk about fraud prevention is a joke! I just got the card and I am a victim of fraud where someone was able to withdrawal funds from the account. The claim process is a joke. I have to wait 45-90 days for a provisional credit after I receive, fill out and send a claim form. I am already struggling to make ends meet with the reduction in my pay due to a disability. This is stressful! I ask myself will this be the first and last time or will fraudsters be able to easily access my funds!
Same my husband account was swiped clean from 2 different ATM that are nowhere near our home. This is a joke is worst experience ever we have a new born at home and this happens.
My Husband and I are off on parental Leave and we just received our money network card and his deposit was removed from his account the same day it got deposit. This is so frustrating I can’t even get to the call center due to high call volume to have our checks mailed out instead. We can’t even log in to check the status of his return on this money network Application it keeps loading all the time we try to sign in, I hope they return his money we filed a claim and they said it will take about 90 days to investigate, but how can someone access his account without the card. EDD needs to do better
Secure?? That’s a big fat lie!! I won a 2 year battle of appeals certified for my benefits and before I even got the physical money network card someone already had the card number and my information and registered the money network card account and stole over $11000. The day before I got the card in mail. Why doesn’t Edd require money network to text the phone number on the Individuals edd account out to register debit card to access benefits?? Then the text would go to the individual do that scammer no matter if they card number they couldn’t register it with account because they wouldn’t get the code because they don’t have your phone. Now I have to wait again to get my money. Funny thing tho- who has your info and knows your gonna get benefits and knows the time frame to transfer? For me from time I certified to time money was stolen was 5 days. I can’t see the account because they used a different email to register it. It should’ve be the email and phone number registered on your edd account it should match your money network account and account should not be allowed to be set up otherwise!! CALIFORNIA: state of continuing to let down their residents … I think it’s an inside job again. There needs to be stiffer punishments by adding benefit enhancements, people that re getting benefits are not in a position to have them stolen.. I wish this state would be more proactive than reactive and give us more protection.. these chips don’t mean anything if there’s no kind of security to register account only your address, DOB, an email if your choosing and address, with all these data breaches it’s way up easy for scammers to get your personal info.. what scammers do not have is your cellular device with your phone number that can receive a code to verify it is you!! Edd implemented this to prevent fraudulent claims, why didn’t they require the contractor to do the same ?? Or have people verify their money network account through IDME, that ensures the funds can’t be touched until identity has been verified. They just made it easier.
Rest assured though our lawmakers and politicians and the people and govt agencies that can do something won’t do anything, they don’t care. Obviously . Or this wouldn’t be happening again. Way to go CALI!! Go with the lowest most unsecured prepaid network !! I’ve lost all faith in this state. No accountability. They protect the thief more than the victim.
Money Network is a load of crap. EDD provides you with a phone number and says if you haven’t received your card you can speak with a live person. I have not received my card. So when I call it asks for the digits for social and dob and then asks for the debit card number.
Problem is I don’t have the debit card number. And then it automatically hangs up. I found another phone number and spoke with someone (overseas I’m guessing) and they asked if this was for EDD, at which point I was forwarded to the same recording as the previous number.
Essentially you can’t get a hold of anyone. The app I hear sucks. What was EDD thinking?