Bank Of America To Pay $225m For Botched Unemployment Debit Card Program Feds Say
Earlier this year, New Jerseys Labor Department dumped Bank of America as the company that delivered unemployment, disability and family leave benefits to residents with prepaid debit cards. The bank at the time said it was getting out of the business.
Bank of America automatically and unlawfully froze peoples accounts with a faulty fraud detection program, and then gave them little recourse when there was, in fact, no fraud, said the Consumer Financial Protection Bureau , which instituted a $100 million fine.
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Bank Of America Fined $225m For Mishandling Unemployment Debit Cards
- Stephen WilliamsTRIBUNE STAFF WRITER
Bank of America has been fined $225 million by federal regulators for unlawfully freezing customers bank accounts while they were collecting unemployment benefits. TRIBUNE PHOTO/ABDUL R. SULAYMAN
- TRIBUNE PHOTO/ABDUL R. SULAYMAN
Consumer Financial Protection Bureau director Rohit Chopra
- Susan Walsh
Bank of America has been fined $225 million by federal regulators for unlawfully freezing customers bank accounts while they were collecting unemployment benefits in the middle of the pandemic.
According to the Consumer Financial Protection Bureau , Bank of America used a faulty fraud detection program to automatically and unlawfully freeze customer accounts, and then offered little recourse, when there was no fraud detected. As a result, consumers were deprived of millions of dollars that was rightfully theirs.
Taxpayers relied on banks to distribute needed funds to families and small business to rescue the economy from collapse when the pandemic hit, said Rohit Chopra, director of the CFPB. Bank of America failed to live up to its legal obligations. And when it got overwhelmed, instead of stepping up, it stepped back.
The bank failed these prepaid cardholders by denying them access to their mandated unemployment funds during the height of the pandemic, and leaving vulnerable consumers without an effective way to remedy their situation, said Michael J. Hsu, acting Comptroller of the Currency.
Bank Of America Owes Over $200 Million To Customers After Botching Unemployment Payments During Pandemic
Posted July 14, 2022 4:51 p.m. EDTUpdated July 20, 2022 4:56 p.m. EDT
Raleigh, N.C. Were learning more about how Bank of America will repay customers, after regulators say the North Carolina-based bank botched the disbursement of state unemployment benefits at the height of the pandemic.
The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency both issued fines last week totaling $225 million dollars. They also ordered the bank to provide back pay to customers who should have been able to collect the benefits but could not, due to the actions of the bank.
The CFPB told 5 On Your Side that people who were impacted will not have to do anything to get a check for money they were wrongly denied. Each customer can also apply for an additional lump sum payment. Customers will be contacted with more information about how to file a claim.
We estimate the harm payments will be in the hundreds of millions of dollars, said Deborah Morris, who oversaw the Bank of America investigation for the CFPB.
The $100 million dollar fine handed down by the CFPB is one of the largest its imposed, as big as the Equifax breach and the Wells Fargo fake account scandal.
Morris says the bank caused real harm to people in need during the pandemic.
Eviction, car repossession, some of these consumers were without access to their accounts for several months, she said.
Asked about the fines, Bank of America issued this statement:
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How Will I Know When Money Has Been Deposited Into By Account
You may choose to receive electronic notification that funds have been deposited into your account. You can request the notification to come via telephone or email. You may request telephone notification using the IVR at the time you activate your card or at any time after card activation. Follow the prompts to set up your phone notification preference. For email notification of deposits to your account, go to Set up your web ID and password and enter your email address. Each time a deposit is made on your account you will receive an email notification. Funds are available for withdrawal at 5:00PM the day they are deposited into your account.
Debit Card Tracking Link
Waiting on your new ReliaCard®? You can track the status of your ReliaCard® using U.S. Banks Check My Card Status. Use Card Tracker to:
- Find out if your card is in production
- Find out if it has been mailed
- View the date your card was mailed
- Find out if U.S. Bank has received the enrollment request from TWC.
To use Card Tracker, select the Card Tracker icon on U.S. Banks ReliaCard website: www.usbankreliacard.com. On the Check My Card Status page, select Texas Workforce Commission from the Select your Program drop-down menu, enter your date of birth and Social Security number in the marked fields, then select submit. Card Tracker is available on U.S. Banks website and on the mobile app.
U.S. Bank will also email you when they create your account to let you know they will be mailing your card soon IF your email address is on file with TWC. Make sure to update your contact information with TWC to include your email address if you want U.S. Bank to notify you about your new card.
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Solutions To Fight Fraud
Ohio is one example of a state in which a public-private partnership helped the states jobs agency turn the tide. With the input from bankers and others, the state agency added ReCaptcha, multifactor authentication, one-time passwords, challenge questions and identity verification to its online and phone systems. Monthly claim volume subsequently dropped by more than 90%.
When we started putting additional fraud detection technology in, we were able to prioritize claims that had few fraud flags, and the inbound claim volume dropped incredibly, Damschroder said. We could tune these systems to not block legitimate claims but also stay ahead of potential bad guys.
The agency also was able to adopt customer service changes such as a callback feature and predictive routing to get callers to a specific individual for help.
We need to have some of the same approaches from a customer-service standpoint and customer experience design standpoint that the private sector already has, Damschroder said.
Ficke says theres more potential now to create improved systems and services. Ohio contracted with LexisNexis to prevent identity theft in the frontend enrollment process, and with Google Clouds government division to help differentiate real citizens from cybercriminals.
Ohio had to use Big Data to assess where the likelihood was of real citizens versus fraudsters, and it prioritized the way we adjudicated claims and helped us accelerate it by months, Ficke said.
What Is Edd Debit Card
To help customers get their Unemployment Benefits, Disabilities, and the Paid Family Program quickly, easily and securely, EDD has partnered with Bank of America to introduce the EDD Debit Card. The EDD Debit Card is the same as any other bank cards that access funds 24 hours a day, 7 days a week and can be used wherever Visa debit cards are received. Do not discard your card as the EDD Debit Card is valid for three years after the date of issue, and will be used for all EDD benefit plans. Bank of America EDD Login
Carefully read your California Employment Development Department deposit agreement and Banking Schedule to ensure you understand any bank fees that may apply to your card, when you receive your EDD Debit Card and receive the package by mail, . Bank Fee can be avoided by careful use of the card.
To get access to money without compensating a charge you can do the following:
- Cash-back shopping in grocery stores, Medical and Drug stores and post offices in the U.S.
- ATM Withdrawal from Bank of America ATMs
- Unlimited cash access to any bank or credit union that accepts Visa cards. .
If you have your EDD Debit Card and have questions, contact Bank of America by phone at 1-866-692-9374, English and Spanish options available.
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Michigan Uia Unemployment Debit Card Customer Service Phone Number
If you have questions about the Bank of America debit card, you can call the Bank of America Customer Service Center toll-free at the number below:
Phone : 1.866.436.1964
Customer service is available 24 hours a day, seven days a week.
It is important to mention that Bank of America representatives cannot answer questions about your unemployment claims or Michigan LEO programs.
If you have questions about your Michigan Unemployment benefits or application, call the LEO at the number below:
If you need a Spanish-speaking representative, wait until you hear the option in Spanish.
For all other languages, the customer service representative will connect you to a translator for assistance.
If you are hearing impaired, TTY service is available at 1-866-366-0004
Account Balance & Transaction History
- Sign up for text alerts
- Hear your recent transaction history
- Report a lost or stolen card and order a replacement
- Speak to a live customer service representative if you need more help
If you have any questions about your ReliaCard or your account, you must logon to www.usbankreliacard.com or call ReliaCard cardholder services at 800-657-6343. U.S. Bank branches, or your personal bank, cannot help you with your ReliaCard account.
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Bank Of America Is Fined $225 Million For Botching Pandemic Benefits
Regulators are fining Bank of America $225 million for bungling the distribution of unemployment benefits amid the pandemic, and are ordering the bank to compensate more than 100,000 people in a dozen states as a result.
The Office of the Comptroller of the Currency on Thursday ordered the nation’s second-largest bank to pay $125 million and compensate those hurt by unfair and deceptive practices related to a prepaid card program. The Consumer Financial Protection Bureau also fined Bank of America an additional $100 million, accusing it of “botching the disbursement of state unemployment benefits at the height of the pandemic.”
At issue: programs administered by Bank of America that largely used prepaid cards akin to a debit card on behalf of 12 states: Arizona, California, Iowa, Kansas, Kentucky, Massachusetts, Maryland, Michigan, New Jersey, Nevada, North Carolina and South Carolina, according to the OCC.
Hired by those states to administer the jobless aid, the Charlotte, North Carolina-based bank “failed these prepaid cardholders by denying them access to their mandated unemployment funds,” while leaving them without a way to fix the situation, Michael Hsu, acting comptroller of the currency, said in a news release.
Bank of America also distributed jobless benefits on behalf of other states, most of which issued the payments through direct deposit.
How To Check The Status Of My Unemployment Debit Card
After you are approved for unemployment benefits, your state may offer you the option of receiving your benefits on a debit card. This card will typically be mailed to you soon after your benefits are approved, and it will be up to you to monitor any activity on it, including the receipt of your benefits.
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Bank Of Americas Unemployment Benefits History
In 2010, Bank of America entered into an exclusive contract with the state of California to distribute unemployment benefits through its prepaid debit cards. At the time, California residents were still reeling from the Great Recession of 2008. With unemployment rates at 12.1%, the state was paying out $66 million per day to jobless Californians. The Bank of Americas debit cards were meant to replace paper unemployment checksa step forward in efficiency according to a report by the Employment Development Department.
The cards were provided at no cost to the state, but the bank agreed to share some revenue from transaction fees. For the cardholders, the bank guaranteed low fees and to provide terms that were more favorable than most people have for their own personal bank accounts, according to the report.
Since the drastic spike in unemployment during the COVID-19 pandemic, problems with Bank of Americas cards, such as money being withdrawn from accounts without authorization or flagged for potential fraud, have resulted in approximately frozen 377,500 cards this past fall, with around 350,000 accounts still impacted.
Ui Debit Card Issuers By State
|AL Vantage Prepaid Benefits Card||Comerica Bank|
|AZ DES Electronic Payment Card||Bank of America|
|Key Bank MasterCard Debit Card||KeyBank|
|Kentucky Unemployment Insurance Debit Card||Bank of America|
|BoA Maryland UI Benefit Card||Bank of America|
|Bank of America UIA Debit Card||Bank of America|
|Missouri Access MasterCard Debit Card||Central Bank|
|Nevada Unemployment Insurance Debit Card||Bank of America|
|New Mexico EPPICard for Unemployment||EPPICard|
|North Carolina DES Debit Card||Bank of America|
|UI Way2Go Mastercard Debit Card||Comerica Bank|
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Protect Your Card Information
U.S Bank will not ask for sensitive account information such as your PIN, password, or account number via e-mail, phone, or text message. Beware of e-mail scams that try to steal your personal banking information by claiming there are problems with your unemployment payment, with your debit card, or with your account.
If you receive a phone call, e-mail or text asking for any such information, forward the note to and then delete the message. If you believe you may have accidentally shared your information, or if you have questions about your debit card, call U.S. Bank ReliaCard customer service at 800-657-6343.
For more information regarding schemes that target debit card users, or to learn how to recognize common scams and what you can do to avoid them, visit:
How Do I Use My Bank Of America Edd Debit Card
The EDD uses a Visa debit card to pay benefits for Disability Insurance, Paid Family Leave, and Unemployment Insurance claims. The EDD will not do a credit check or monitor the use of this prepaid debit card, which is a quick, practical, and secure way to receive your benefit payments. You can accomplish the following using your debit card.
- You will receive your funds sooner.
- Anywhere that accepts VISA, you can use it.
- Withdraw cash from ATMs, banks, and retailers that offer cash back.
- Transfer funds to your preferred financial institution at no additional cost.
- Be notified when a deposit is made to your card or when your balance falls below a certain threshold.
- A Zero Liability Policy will protect you from fraud.
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Coming Back For Seconds
As BofA and Californias jobs agency were trying to stop fraud on the front end, many of the criminals who had first duped the state into paying them jobless benefits sought to double-dip by filing fraud claims themselves with BofA.
When a cardholder reports fraud on a prepaid card, banks are required by the Electronic Fund Transfer Act to give provisional credit within 10 days of being notified of an error, typically a purchase the consumer claimed it didnt authorize. Banks typically have 45 days to conduct an investigation, and if fraud isnt found the credit becomes permanent.
Fraudsters were well aware of the law, known by its implementing statute Regulation E. After first duping the state employment agency into paying jobless benefits, thousands of fraudsters then sought to double-dip by filing claims to get provisional credits from the bank. BofA told state lawmakers in December 2020 that it had paid hundreds of millions of dollars, in credits to fraudsters.
Before the pandemic, BofA distributed jobless benefit programs in 12 states. Today it serves only two California and New Jersey. Last year, BofA tried to get out of its contract with California, but was denied by the state.
While some agencies have adopted best practices, others have not. It is also unclear what impact there will be on consumers if banks bail out of the programs.
Its going to create a crisis for beneficiaries if banks dont do this work, Talcove said.
Expedited Transfer Via App
Roxanne Teran was extremely quick to pick up the phone to help me. She mentioned the convenience of online transfers, and assured me that the language used only referred to a short period of time as opposed to one-and-done, per sé. In any event, after verifying my identity, I did the transfer in less than a minute, partially since my bank info was already saved from a previous transfer a couple months prior. I told Roxanne that I was also cut-off 3 or 4 tines that previous date, so not having this time to keep calling in and verifying my card number/security hint made me feel safer.Roxanne showed great patience early when I realized that I had the wrong card in hand and waited while I hunted down in about a minute through a crowded drawer, the correct one. Thank you to her and BofA for your support during ongoing challenging covid-related instances.
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