Bank of America Froze 350K Unemployment Debit Cards, Alleges New Class Action Lawsuit

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California residents who were unable to access their unemployment benefits after Bank of America froze their state-issued debit cards have filed a class action lawsuit accusing the bank of lax security measures.  

Lead plaintiffs, Julie Hicks, Kuang Ting Chong, and Stephanie Moore, want to represent other Californians who were left high and dry during the coronavirus pandemic after Bank of America froze unemployment debit cards to combat fraud. In their class action lawsuit filed Tuesday, they say “systematic failures” in Bank of America’s security led to the breaches and the bank’s actions punished the unemployed by denying them access to desperately needed funds.  

Hicks, Chong, and Moore say they are three of the hundreds of thousands of Californians who received a Bank of America debit card to access unemployment benefits — their only source of income in the face of a global pandemic that resulted in massive layoffs. Each of the plaintiffs say they were blindsided when Bank of America unexpectedly froze their accounts in response to an uptick in fraud, facing declined transactions when purchasing tires, food for their children, and other necessities.  

They say the debit cards issued by Bank of America to them and others entitled to unemployment benefits were subpar when it came to securing their unemployment benefits.  

The Bank of America unemployment debit cards issued prior to 2021 did not come with several key security features, including an “EMV” chip, say the plaintiffs.  

“EMV chips are small, metallic squares that create unique transaction data each time the chip is used to make a purchase,” explains the class action lawsuit. “Debit cards without chips are extremely easy for thieves to duplicate. All a thief needs to create a duplicate card is data from a single debit card purchase.” 

The plaintiffs say that EMV chips have become standard in recent years to protect consumers from identity theft; however, despite being readily available and inexpensive, Bank of America issued unemployment debit cards without this technology. 

As a result, Bank of America unemployment debit cards were targeted and hacked on a large scale by identity thieves in 2020, say the plaintiffs.  

“These individuals used clone cards, likely created from information obtained on the dark web, to initiate fraudulent ATM withdrawals throughout California,” alleges the class action lawsuit.  

Bank of America responded to the uptick in fraudulent activity in October — by freezing the accounts of nearly 350,000 unemployed Californians, allege the plaintiffs.  

In addition to being unable to access unemployment benefits, Bank of America also reversed fraud credits to create negative charges for recipients, leaving them unable to access funds already in the accounts, claims the class action lawsuit. 

The plaintiffs want to represent Californians who had their Bank of America unemployment debit card cloned by identity thieves, as well as those who were unable to access their benefits as a result of the bank’s sweeping decision to freeze or reverse credits on their accounts.  

They are seeking damages on behalf of Class Members along with a court order prohibiting Bank of America from denying unemployment benefit recipients access to their accounts.  

Bank of America was hit with a series of class action lawsuits filed by California unemployment benefit recipients and ordered to provide immediate relief earlier this year. Ten class action lawsuits claiming Bank of America improperly handled unemployment benefits during the pandemic, resulting in frozen accounts and fraud, were consolidated into federal court in the Southern District of California in June.  

Was your Bank of America unemployment debit card frozen? We want to hear from you! Tell us about your experience in the comment section below.  

The plaintiffs are represented by Benjamin Gubernick of Gubernick Law, PLLC, and by David N. Lake, of Law Offices of David N. Lake, A Professional Corporation. 

The Bank of America Unemployment Debit Card Class Action Lawsuit is Hicks et al. v. Bank of America, N.A., Case No. 5:21-cv-05544, in the U.S. District Court for the Northern District of California.

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