Bank of America settlement resolves prepaid unemployment card class action

Update: 

• Bank of America reached a settlement in principle with customers who claim the bank failed to adequately safeguard against fraudulent activity on prepaid debit cards used for pandemic-related unemployment benefits. 
• The news comes according to a memo Bank of America filed Sept. 20 in a New Jersey federal court. Attorneys for the plaintiffs and the bank asked U.S. District Judge Brian R. Martinotti to stay all deadlines so the deal can be finalized and to order the parties to update the court within 60 days.
• A New Jersey federal judge previously dismissed the class action lawsuit in July 2023, ruling at that time that the BofA customers would need to bolster their claims with more details for them to be allowed. 
• The customers amended their complaint and filed again in December, marking the third time the complaint had been amended. 
• A customer initially filed the class action lawsuit in 2021, arguing an alleged card skimmer stole her COVID-19 unemployment benefits. 

Bank of America unemployment debit cards class action lawsuit overview:

• Why: The plaintiff accuses the banking giant of mishandling unemployment benefits debit cards, thus failing to protect vulnerable New Jerseyans from debit card fraud and further financial problems.
• Who: A New Jersey resident filed a class action lawsuit against Bank of America.
• Where: The class action lawsuit was filed in New Jersey federal court.

(Jan. 5, 2022)

Bank of America faces a class action lawsuit for its supposed mishandling of New Jersey unemployment benefits, resulting in the loss of thousands of dollars of benefits and compromised personal and account information. 

The New Jersey Department of Labor & Workforce (LWD) had contracted Bank of America to issue debit cards to individuals receiving unemployment benefits. Bank of America promised “best-in-class” fraud monitoring and to comply with banking and transfer laws. The class action complaint contests these representations of Bank of America’s services. 

The class action lawsuit was filed by Cassandra Valerie Beaman, a New Jersey resident who lost her job in March 2020 after the start of the coronavirus pandemic and began receiving unemployment benefits via a Bank of America LWD debit card. In May 2021, Beaman noticed and reported $300 worth of fraudulent activity on the account.

Since then, Beaman has allegedly called Bank of America more than 20 times. Beaman says that Bank of America has yet to credit her account for the stolen money, unfreeze her account or re-authorize access to her account. Beaman argues that as “a direct consequence of Bank of America’s actions,” she missed a rent payment and a phone bill and has struggled to afford other life necessities. 

Beaman seeks to represent a nationwide class of all persons who were Bank of America LWD debit cardholders at any time between Jan. 1, 2020, and the present, and whose eligibility for benefits LWD has not revoked for failure to establish valid identity. She also proposes several subclasses to cover the accusations of claim denial, untimely investigations, credit rescission, account freezing, account blocking, security breach and lack of EMV chips. 

BofA skimped on consumer protections, complaint says

Central to the complaint is that Bank of America “treated these Cards and Accounts with less care than it affords its regular consumer debit and credit cardholders.” For starters, the LWD debit cards are equipped, not with industry-standard EMV chip technology, but with now-outdated magnetic strips which are known to be susceptible to skimming, cloning and other methods of theft, according to court documents. 

After customers experienced fraudulent activity, Bank of America allegedly gave them the runaround on customer service phone lines. Once a customer reached a representative, their fraud claims were denied allegedly “without investigation or explanation” and their accounts were frozen indefinitely. This behavior shows the bank’s failure to “implement adequate and reasonable systems, measures, and protections,” the complaint says. 

The denial of LWD customers’ fraud claims also breaches its “Zero Liability” policy, which promises to protect customers from adverse financial consequences due to fraudulent usage. 

Beaman seeks relief prohibiting Bank of America from continuing its allegedly wrongful conduct; an award of all recoverable compensatory, statutory and other damages; an award of punitive damages; reasonable attorneys’ fees; taxable costs; and pre- and post-judgment interest. 

Did you receive a Bank of America LWD debit card? Share your experience with us in the comments section below.

The plaintiff is represented by George Haines of Freedom Law Firm and Joshua B. Swigart of Swigart Law Group APC. 

The Bank of America unemployment debit cards class action lawsuit is Beaman v. Bank of America, N.A., Case No. 2:21-cv-20561, in the U.S. District Court for the District of New Jersey. 

Read About More Class Action Lawsuits & Class Action Settlements:

• Lawsuit claims Apple, Visa, Mastercard made anticompetitive agreements
• Axos Bank class action alleges company misleadingly advertised high-yield savings accounts
• Pioneer Bank class action alleges company improperly assesses overdraft fees
• CFPB issues Bank of America $12M fine over alleged false mortgage applicant information