EDD FRAUD CRACKDOWN… $81 Billion PAID! 400k New Applicants in August

Critics say the EDD is relying on outdated technology.

You use older technologies, hackers will always find a way to go through older technologies,” said Howard Yee, an unemployed web developer who’s been navigating the EDD phone tree.

“As far as I can tell, EDD hasn’t changed its system for, easily, 20, 30 years,” Yee said.

And having an old system deal with today’s problems, from fire- and unemployment-related claims to fraudsters, makes for a very busy agency.

But former EDD director Michael Bernick said the added security is a must and “shouldn’t have a major impact.”

Bernick said the agency has to straddle carefully as it differentiates between claimants and con artists..

“There is that balance always in the system between the speed of processing and the fraud, opening it up to fraud,’ Bernick said

It’s no surprise the EDD is a juicy target for thieves. It’s now paid more than $81 billion in benefits since March.

“It’s been particularly heightened during the pandemic, just because of the money at stake,” Bernick said.

Last month, the San Mateo County sheriff’s office implicated 21 jail and prison inmates – including those convicted of murder – in a scheme to collect $250,000 in unemployment benefits.

“It’s unusual in the sense that what you have now are much more sophisticated rings,” Bernick said.

The EDD is aggressively fighting fraud in the wake of unscrupulous attacks on the unemployment program here in California and across the country. These perpetrators are often using stolen identity information from national and global data breaches, as well as exploiting expedited payment efforts in the federal Pandemic Unemployment Assistance (PUA) program. Claims identified with suspicious account information have been closed and EDD investigators are partnering with local, state, and federal law enforcement to expose and prosecute offenders to the fullest extent of the law.

Customers should be aware of a few other actions taken that could impact some legitimate claimants:

No automatic backdating of PUA claims The EDD is no longer automatically backdating new PUA claims in order to stop perpetrators from targeting earlier months when federal stimulus payments were available. Legitimate PUA claimants, including small business owners and independent contractors, who believe their claim should be backdated from when they initiated their claim are encouraged to contact the Department in one of two ways:
Submit an online inquiry through AskEDD. Select Unemployment Insurance, then Claims Questions sub-category, and then Backdate the Effective Date of my Claim Due to COVID-19.
Speak to a representative by calling one of the two EDD UI Call Centers at 1-833-978-2511 or other numbers listed on our Contact EDD page.

Limiting multiple claims at same addresses While there are legitimate reasons different workers would be living or collecting mail through the same address, the EDD has shut down multiple claim situations following key identified patterns. These situations are believed to be fraud and scammers will often try to intercept, redirect, or gather mail associated with these claims. The EDD warns Californians that the Department will not send representatives to your home and encourages you to help the Department combat fraud by reporting it and using one of the following steps with any mail you may receive that does not pertain to you:

Send any fraudulent documents or mail directly to EDD investigators through EDD PO Box 826880, MIC 43, Sacramento, CA 94280-0225.
Write “Return to Sender” on the envelope and provide it to your mail carrier. Envelopes that may contain debit cards that have yet to be activated can also be returned to sender. The cards are sent on behalf of the Bank of America from an address in Tennessee.

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