EDD Freezing Thousands of Unemployment Debit Cards

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Earlier this year, thousands of unemployment benefit recipients found themselves having had their EDD debit cards frozen. The Employment Development Department (EDD) began freezing unemployment debit cards due to suspected fraud in an attempt to halt falsified claims. 


Debit cards were frozen for a variety of reasons including multiple claims at the same address. EDD admitted to having frozen over 350,000 debit cards but at the time were unsure of how much these cards equated to in total. That being said, some of the accounts in question were revealed to contain up to $20,000. 


EDD acted to freeze these cards in an attempt to take advantage of the opportunity to identify which of them were truly fraudulent. The ultimate goal was to recover fraudulent funds as quickly as possible, however, the resulting side effect put thousands of recipients in desperate need of a solution to their rightly owed unemployment funds. 


More recently, in early June, a federal judge has banned Bank of America from freezing unemployment debit cards based solely on an automated fraud filter. Additionally, the ruling requires EDD to do a significantly better job of providing support and increased responsiveness in assisting jobless Americans in accessing their funds.  


The federal ruling was initiated by the lawsuit of 15 unemployed Californians who were among those whose access to their funds was restricted by the freezing of their debit cards. 


The court order aims to provide relief to the thousands of people that were affected by EDD’s decision to freeze their debit cards months ago. Additionally, it requires the implementation of new customer service phone lines to provide ongoing support to unemployment recipients experiencing challenges accessing their distributed funds. 


In early January, it was found that at least $11 billion in fraudulent benefits had been involved in the freezing actions, not to mention an additional $19 billion in claims still under investigation. 


Many of the fraudulent claims were deemed fraudulent after being identified as having been claimed from the same address. While it was the case that many of the frozen accounts were, in fact, the result of genuinely fraudulent claims, it has since been found that many of them were that of legitimate claims from unemployed Californians. 


Overall, the federal court order enacted in early June serves to support the ongoing need of unemployed Californians in accessing their rightfully earned benefits allocated through EDD. The actions put in place through this court order should support not only those affected by the debit card freezing situation, but also provide additional access to customer service for the coming future.