California EDD employee speaks out, says thousands are losing unemployment benefits by mistake

SAN FRANCISCO -- Monday ended a two-week hiatus at the EDD to clear a backlog of cases and stop rampant fraud.

During the two weeks, EDD has been trying to stop unemployment payments from going out to scammers. But San Francisco's KGO-TV has found many legitimate workers had their benefits cut off too -- causing a lot of hardship.

KGO is hearing from more and more workers who find the EDD has frozen their accounts without warning. And an EDD call center employee tells the news station: If you call the EDD hotline, no one there will know what's going on.

KGO had previously reported about Ben Chrimes of San Jose. He lost his job at Levi Stadium when the pandemic hit, and was collecting unemployment -- until this. "They've blacklisted this address," Chrimes said. "These are all from the EDD."

Ben shows a stack of letters. His family started getting letters from EDD addressed to complete strangers -- turns out scammers were using their address to file phony claims.

After his dad reported it to the EDD, Ben got a rude surprise.

"I went to pay my cell phone bill and the card was declined," he said.

Man reports fraud, EDD cuts off benefits to entire household

Households across the country have been receiving letters from the California EDD, but addressed to strangers. To prevent fraud, the EDD is now cutting off benefits to those households -- and in one case, cut off a legitimate claim.

The bank told him EDD blocked Ben's account and eight others using his address - those were the scammers.

The same thing happened to Linda Dodge of San Jose. She too was collecting unemployment when scammers began using *her* address. She has hundreds of EDD letters in their names. "There's a lot," she said.

And her benefits were cut off too.

"They told me there was an open fraud case on my card," she explains.

Britany Slattery in San Diego had it happen to her, too: a legitimate claim, suddenly cut off. "They said it's fraud, we can't help you, call EDD. I said that's crazy, I need to talk to a supervisor," Slattery recounts.

And now an EDD call center employee who wishes to remain anonymous tells us calls like these started pouring in to the EDD hotline last week.

"They're saying their account has been blocked, their account has been frozen, their account has been closed, that EDD has closed their account," the EDD employee told KGO.

"This isn't just two or three people. This is thousands of people all over the state of California... suddenly cannot access their funds. Cannot use their card," the employee said.

The employee said it's not just folks like Ben and Linda getting cut off -- but a broad range of the unemployed, whose claims are in good standing.

"They're getting a surprise. A terrible surprise. With no alert to them, no text, no phone call, no anything. You use your card one day the next day you try to use it again, it's refused. Your account is locked. Not good." said the employee.

The employee says folks call her right from the store or bank where their cards were declined -- pleading for her to unlock their accounts.

"They go to the grocery store, try to use their card. 'Your card doesn't work, do you have another one...?' I just had a poor guy standing in the parking lot calling me saying, 'I just called Bank of America saying you just locked my account. What am I gonna do?' This poor guy is ready to cry. 'Cause he can't get his groceries," she said.

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Then there was the mom at a drive-thru restaurant.

"She's driving though Jack In The Box with kids in the car and they can't use the card. She calls us, says my card isn't working. I said you should call Bank of America," the employee recalled.

The employee is one of thousands hired through a third party company to help with overwhelming calls to EDD during the pandemic.

But when people call for help, the EDD computer screen doesn't show the block on their account. So it appears EDD is not responsible, and she's told to simply refer them back to Bank of America -- which in turn refers them back to the EDD.

"I had a guy waiting an hour in the queue to get the answer of, 'Gosh there's nothing wrong with your account, call Bank of America.' 'They transferred me here!'"

It's a vicious cycle full of long waits on hold.

And she says no one at EDD told the call center workers why accounts are blocked or how to help.

"I wish I knew, no one seems to have that answer... Why this is happening all of a sudden, and so widespread? Shouldn't they tell at least the people working for them, 'Hey this is what's going on because you're gonna get a lot of calls.' Or tell the person, you're not going to be able to use your card for X number of days or whatever," said the call center employee.

We asked the EDD about the call center employee's concerns. A spokesperson did not respond directly, telling KGO:

"As we zero in on these unscrupulous offenders, we are doing everything we can to verify legitimate claimants in the mix and minimize any impact on their accounts."

The EDD said it has been cutting off suspicious "high volume" claims filed at single addresses.

But EDD has not said how many valid claims are also being cut off, why it hasn't alerted call center employees to the shutdowns, or how to respond to the desperate callers.

The employee said it's heartbreaking to hear them.

"It's not their fault. They didn't do anything wrong. And they're hurting. They're scared. They're upset. And right now there's nothing I can tell them," she said.

The EDD says many workers may need to file new ID verification documents to get their accounts restored. And this week EDD reopens after a two-week hiatus.