LOS ANGELES (CBSLA) — A federal judge has issued a preliminary injunction against Bank of America, which froze millions of EDD accounts suspected of fraud.
The injunction forces Bank of America to unfreeze accounts and reopen investigations into stolen unemployment benefits issued on prepaid bank debit cards. The bank was also ordered to improve its customer service.
California contracts with Bank of America to distribute EDD funds. Nearly 45% of the state’s workforce filed for unemployment during the pandemic, overwhelming the system. Thousands of people were unable to get their legitimate unemployment claims to go through, while fraud cost the state’s EDD as much as $11 billion.
A representative for Bank of America says it will meet the requirements set by the judge.