California EDD’s mass suspension of accounts hangs over jobless

San Francisco Chronicle

Carie Mathis’ housecleaning business collapsed when the pandemic started. The single mom went on unemployment to support herself and her twin 15-year-olds, but couldn’t make the rent payments for their Rodeo house. They moved in with her parents in Vacaville. She bunks in the garage so the kids can have bedrooms.

In December, her unemployment benefits were suddenly suspended. “Every bit of income that ... was coming in was stopped dry,” she said. She spent hours fruitlessly calling California’s Employment Development Department. On New Year’s Eve, she finally got an email explaining that she was among 1.4 million accounts the state had frozen because of suspected fraud.

The fallout from EDD’s massive suspension of accounts is continuing to hit jobless people who are desperate to get their benefits reinstated. The agency has been sending emails and letters telling claimants how to prove their identity, but it’s doing so in batches to keep from overwhelming its systems. EDD has told lawmakers that it could take until mid-February to finish authenticating suspended accounts.

Even those who have been notified are struggling. Mathis has spent hours online submitting identity documents, calling EDD and then submitting them again.

She’s reduced to asking her parents for grocery money and worried about losing “everything under the sun that is near and dear to my heart” if she can’t pay for her storage unit. She’s set up a GoFundMe for help.

“I go to bed at night and my head spins like, ‘When is this ever going to stop?’” she said.

“I have run out of words to describe my frustration with this situation,” said state Assembly member David Chiu, D-San Francisco. He said he’s working with other legislators on bills to reform EDD and probe its issues with scammers. “I suspect the level of fraud caused them to feel they had to hit the emergency shutdown for everyone,” he said. He still faulted the agency for not being “more discerning” about those seeking benefits.

“It is unconscionable that EDD cannot distinguish between legitimate claimants who have a history of employment and those who are making things up as they go along,” said Assembly member Jim Patterson, R-Fresno. “The desperation is just heartbreaking.”

As frustration mounts, the CEO of the outside company that verifies claimants’ identities says his company is working as quickly as possible to help authentically jobless people and weed out armies of fraudsters seeking to siphon billions of dollars from California.

“You’ve got the Russians, Chinese, Nigerians, Ghanaians and even domestic criminals who are attacking this agency at scale,” said Blake Hall, CEO of “And those nation-state actors and organized crime rings ... keeping them out while also helping legitimate people is really difficult, and right now organized crime is just all over the state.”

EDD hired in October after a task force convened by Gov. Gavin Newsom faulted the agency for its slow handling of claims. The McLean, Va., company does ID verification for 14 states’ unemployment systems, as well as other government agencies. said it verifies nearly 2 million people a month nationwide. said it has verified 847,289 California claimants from Oct. 1 to Jan. 12 and blocked 488,308 fraudulent claims in the state.

Hall said its automated, self-serve process can handle about 88% of people, while the rest must go through a video-chat verification. People who don’t have computers to do the online verification are referred back to EDD, he said.

Social media are flooded with stories of people waiting five hours or more for’s video chats, even though Hall said ordinary wait times are 30 minutes to two hours. He said the company is hiring about 40 new video chat staffers every week.

“Unfortunately, this influx of fraud and claimants is contributing to longer wait times for legitimate claimants,” he said. “Users who encounter issues have often been waiting for benefits for weeks and months, and they take that frustration out on us, which is understandable.”

Others say they’ve completed their verification without having their benefits reinstated.

“I followed everything I was supposed to do, and I still am without benefits, (even though) it said ‘Congratulations, you’re verified’” two days earlier, Mathis said Thursday.

Hall said reinstating accounts is a question for EDD.

The agency did not respond to questions. It sent a statement that said, “As claimants have their identity verified, EDD is removing barriers on claims so payments can continue for eligible claimants — something that can occur in a matter of days.” Claimants should continue to certify for their benefits while their accounts are suspended to minimize future delays, it said.

Shelly Ross’ pet-sitting company, Tales of the Kitty, has seen business implode. She laid off herself and most of her 14 employees, setting up a GoFundMe account to help her workers.

She, too, saw her benefits suspended in December and spent hours trying to call EDD. On Friday, she finally got a message asking her to verify her identity with, which she did — but her account remained frozen.

“I’m not sure I can pay my rent in February,” she said.

On Friday, Bank of America, which issues the debit cards used for EDD benefits, was sued for allegedly failing to sufficiently protect unemployment benefits from scammers.

“Bank of America failed to safeguard the accounts of EDD debit cardholders and then failed to handle fraud claims when made,” Brian Danitz, a partner at law firm Cotchett, Pitre & McCarthy, said in a statement. “Hundreds of millions in California unemployment benefits have already been lost to fraud.”

Bank of America pointed to comments from EDD that it did not ask the bank to include chip technology in the debit cards.

“Bank of America is working every day with the state to prevent criminals from getting money and ensuring legitimate recipients receive their benefits,” it said in a statement. While most scams occur via fake applications, it said, “when fraudulent transactions occur on benefit cards we review those claims and restore money to legitimate recipients.”

Mathis summed up the despair that many cut-off people are feeling... (To read the entire article, please click HERE)

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