California’s Employment Development Department has suspended unemployment payments for numerous people because of fear of fraud. Many Californians who said they are legitimately unemployed flooded social media over the weekend with laments that they desperately need the benefits that they rely on for housing, food and other necessities.
“You have been receiving unemployment benefits, but we have temporarily suspended your claim because it may be tied to fraudulent activity,” said a notice dated Dec. 31 that many people received. “You will receive further instruction from EDD on how to verify your identity beginning Jan. 6, 2021.”
In a tweet on Sunday, the agency said, “As part of ongoing efforts to fight fraud, EDD has suspended payment on claims considered high risk and is informing those affected that their identity will need to be verified starting this week before payments can resume. More details on the EDD website in the days ahead.”
As part of ongoing efforts to fight fraud, EDD has suspended payment on claims considered high risk and is informing those affected that their identity will need to be verified starting this week before payments can resume. More details on the EDD website in the days ahead.
— EDD (@CA_EDD) January 3, 2021
Some social media posts said hundreds of thousands of people were notified. The EDD declined to say how many people are getting identity-verification requests. In an email, spokeswoman Loree Levy said, “EDD continues to strengthen its fraud detection methods and apply them to new and existing claims to further reduce the fraud that has plagued unemployment systems throughout the country.”
The employment department sent many other requests for ID verification in late November, around the same time it asked almost a million self-employed people to document the 2019 income they reported when they applied for pandemic unemployment assistance, a program under the Cares Act of 2020 that provides federal benefits to those not eligible for state benefits.
“Given how many legitimate (pandemic unemployment assistance) recipients received this notification of potential fraud, it appears that EDD has overestimated the suspicious accounts,” said Daniela Urban, executive director of the Center for Workers’ Rights in Sacramento. “EDD’s requests to verify claimant identities continues to be a primary cause of delay in timely accessing much needed benefits.”
Even some elected representatives said they have not been able to reach EDD for answers about halted payments. The agency “is taking a sledgehammer approach instead of a scalpel approach to the fraud problem” by freezing so many accounts, said state Sen. Scott Wiener, D-San Francisco, who has received at least 50 complaints in recent days from constituents whose accounts were frozen.
“It’s very frustrating that EDD did this and we still haven’t heard back three or four days later,” said Wiener, whose office contacted the agency last week about the issue. “I get that there’s a fraud problem. But when you have people who have been receiving benefits for a number of months, you don’t just shut off their benefits. If EDD needs additional evidence that someone is who they say there are, then ask for that information and give them a deadline before (they) shut it off.”
Unemployment has soared during the pandemic and shelter-in-place, hitting a record high 15.5% in April. EDD has struggled to cope with the surge in applicants, leaving many unemployed people frantic to get benefits.
In September, a strike team appointed by Gov. Gavin Newsom to investigate the growing backlog of unpaid claims identified numerous bottlenecks. Among other things, it faulted the EDD for manually verifying identities in a way that prevented legitimate claims from being processed while catching “relatively few cases of fraud.”
“Every month there’s a new EDD fiasco,” Wiener said. “Since the pandemic, my district staff probably spend two-thirds of their time on EDD issues, at times higher than that. It’s like EDD is building the plane while flying it,” Wiener added.
Reports continue to surface of fraudulent claims being paid out to toddlers, prisoners including notorious Death Row inmates, and an applicant who impersonated U.S. Sen. Dianne Feinstein. Bank of America, which issues the debit cards that contain benefits, estimated the fraud could reach $2 billion.
In her email, Levy said, EDD used “Thomson Reuters fraud criteria” and “additional industry standard fraud detection criteria” to review existing claims and stop payment on “higher risk claims.” It notified those affected that it will require identity verification “or additional eligibility determinations starting later this week before payments can resume.” She said EDD “wanted to move quickly” to avoid paying out the extra $300 per week in federal benefits approved by Congress for up to 11 weeks starting Dec. 27 to fraudulent claimants.
Instead of fixing the system, EDD’s new ID protocols “made (it) harder for people to apply,” said Ellyn Moscowitz, head of employment law at Legal Aid of Marin. Spanish speakers, people from other countries, and people without computers are particularly affected, she said. Addresses with multiple unemployed people are targets, which “disadvantages immigrant families that live in multi-generational households,” she said.
“We walk them through it, but it takes a lot of time,” she said. “There is disruption in their payments for weeks. ... Most of them eventually get their money again, but plenty just give up because they’ve made the process so hard.”
Clint Snider, who lost his job managing a Soup Plantation restaurant in Southern California, said he noticed Monday, Dec. 28, that his latest payment was pending rather than paid. He called EDD and was told payments were late “because of the holidays, and there were no issues going on,” he said. “I called back Tuesday, and that’s when I started hearing about the ID verification process.”
The next day, he uploaded his identity documents, and got a receipt saying EDD had received them. But still he didn’t get paid. So on Sunday, he called EDD again. The representative “told me they did receive my documents, but not the back of my ID. Nothing in the messaging said you had to include the back of the ID,” he said. “In the drop-down menus, it says you can only upload one photo, so you have to have the front and back both on one side. And you only have 30 minutes to upload your documents.”
So he reloaded them on Sunday and called EDD again but hasn’t been able to reach someone who could help. “The last time I received payment was Dec. 13,” Snider said. Since then, “I’ve been relying on the kindness of family to get by.”
Monica Norcia of San Rafael also got the notice dated Dec. 31. “My first thought was, this had to do with the prison stuff, because there has been fraud,” she said. “I was puzzled somewhat. I haven’t had a problem with them. One of my first thoughts was, I hope somebody didn’t take my identity.”
On Wednesday, Gavin Newsom appointed Rita Saenz as EDD director, replacing Sharon Hilliard, who retired Thursday after nearly 40 years with the agency. Saenz, 71, has more than 40 years of experience in state government and the private sector. From 1998 to 2004, she was director of the California Department of Social Services.
Carolyn Said and Kathleen Pender are San Francisco Chronicle staff writers. Email: csaid@sfchronicle.com Twitter: @csaid @kathpender
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California freezes many people’s unemployment benefits to combat fraud - San Francisco Chronicle
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