How EDD, Bank of America Make Millions on California Unemployment

 BY 

She didn’t know it at the time, but last September was when everything started to unravel for Julie Hansen. It was late in the month when the furloughed Disneyland candy maker noticed a string of suspicious charges totaling $12,222.23 on her state-issued Bank of America unemployment debit card. First, the money was credited back to her account. Then it disappeared again, setting in motion a chain of events that left her and her son homeless.

Behind the scenes, California’s Employment Development Department and longtime debit card contractor Bank of America were scrambling to rein in rampant fraud. They froze some 350,000 unemployment accounts around the time Hansen’s card was cut off.

The catch: while Hansen and other out-of-work Californians were left in financial purgatory unable to access unemployment money, a Great Recession-era contract ensured that the state and the bank kept raking in millions of dollars in merchant fees whenever debit cards still in circulation were swiped.

In September, the EDD made $5.2 million on a debit card revenue sharing agreement with Bank of America — a sizable chunk of the $22.5 million the state raked in from March to October, according to public records requested by CalMatters. How much money did Bank of America make on its end of the deal?

Read the rest of the story on North Coast Journal of Politics & Arts


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David Puu

Yikes. Robber barons!

Curious

Will there be a follow up story to this? Will the EDD and Bank of America be returning funds since they were acquired through fraudulent means?