Californians File Class Action against Bank of America for Freezing Unemployment Benefits

Julie Hicks, Kuang Ting Chong, and Stephanie Moore filed a class action complaint in the Northern District of California on Tuesday against Bank of America, N.A. for allegedly withholding their unemployment benefits and freezing their debit cards in the midst of the pandemic.

California residents who receive unemployment benefits are given Employment Development Department (EDD) debit cards that are issued through Bank of America (BOA) with a corresponding BOA account, the complaint explained. The EDD benefits are directly deposited into these BOA accounts, which are wholly owned by the residents; according to the plaintiffs, This account and debit card are “the only means of  accessing unemployment benefits for hundreds of thousands of Californians.”

The plaintiffs alleged that hackers “exploit[ed] BOA’s lax security measures to gain unauthorized   access to [EDD cards]” since “No EDD Cards issued by BOA prior to 2021 have an ‘EMV’ chip.” EMV chips are “small, metallic squares that create unique transaction data each time the chip is used to make a purchase” and debit cards without chips are “extremely easy for thieves to duplicate.”

As a result, hackers allegedly gained access to numerous EDD accounts, and BOA reacted by “den[ying] EDD benefits recipients access to funds by freezing accounts and by reversing  credits for fraudulent withdrawals that BOA had previously granted.” The plaintiffs lost access to their unemployment benefit accounts for several months as a result, the complaint said.

The plaintiffs are suing on the counts of negligence, a violation of Electronic Funds Transfer Act, breach of contract, a violation of the California Consumer Privacy Act, breach of implied duty of competent performance, and a violation of the Unfair Competition Law.

The plaintiffs are seeking class certification, an order declaring BOA’s actions were negligent and in violation of several laws, a permanent injunction enjoining BOA, compensatory damages, restitution, attorney’s fees and costs, and other relief.

The plaintiffs are represented by Gubernick Law P.L.L.C. and the Law Offices of David N. Lake, A Professional Corporation.