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Bank of America Taking Back Unemployment Benefits?

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EDITOR NOTE: In California, a number of people receiving unemployment benefits saw their balances disappear from their Bank of America issued EDD (Employment Development Department) debit cards. We’re talking tens of thousands. Part of the blame goes to EDD, part of it to Bank of America, and in a few cases, third-party theft was to blame. The main point here is that when a major disconnect happens between institutions and individuals who rely on their digital funds, the individual often pays the costs. Not the most promising scenario for a digital monetary future. It also means that when it comes to your digital money, the banks or the government “own” your money. And for reasons ranging from error to intention, your digital money can be taken away--that is, wiped the stroke of a key.

SAN FRANCISCO -- California's Employment Development Department is fighting rampant fraud -- but in the process, many unemployed workers say their accounts are frozen and their money is suddenly gone.

Bank of America has been draining money out of countless EDD accounts, leaving many people bewildered and broke.

Michael Covant of San Francisco lost his job as a bellhop when hotels had to close in the pandemic.

It took months to get his EDD benefits, and when he finally did, the bank took them right back.

"Literally I've been betrayed by EDD," said Covant. "The most frustrating part is everyone telling me everything's OK when it's not OK."

RELATED: EDD mistakenly takes $10,000 from CA man's account in attempt to fight suspected fraud

Covant discovered something was wrong when he used his EDD debit card to order a pizza and suddenly the card didn't work.

"So then I called Bank of America first to see why the card was suspended. They said, 'Oh only EDD can do that, contact EDD.' So I contact EDD, they say, 'Oh only BofA can do that.'"

When he called the bank again, he said the agent was stunned at what he saw.

"They said, 'Whoa, whoa. The EDD is pulling out the amounts transaction by transaction by transaction,'" Covant recalled.

Here's what he saw: the EDD was pulling Covant's benefits back out of his account, one chunk at a time until all $16,000 was gone.

"He said, 'In my 25 years of banking I've never seen anything like this.' He was as bewildered as I was," Covant said.

Covant saw our sister station KGO-TV's earlier report about Anthony Serafino of San Francisco. The EDD pulled $10,000 out of his account one payment at a time, too.

Now viewers all over the state are saying Bank of America is draining their EDD accounts.

Covant says EDD and the bank offered him no explanation.

"You guys took $16,000 from the account. Where did it go? From their end it was they didn't know what I was talking about," he said.

Bank of America said it is removing funds from some EDD accounts due to suspicious activity on the cards.
In Covant's case, he reported his original EDD debit card was stolen in the mail. A thief ran up $16,000 in charges.

Bank of America restored the fraudulent charges weeks ago, only to take all that money back now.

RELATED: EXCLUSIVE: Insiders say California EDD unemployment benefit scam was get-rich-quick scheme

"There is nothing in there. They left nothing," said Covant.

Bank of America said customers now must contact the bank and try to claim that money back.

The bank issued this statement, saying in part:

"The action was part of our broad effort to fight fraud. There has been billions of dollars of fraud during this pandemic in state unemployment programs, including California. We are working with the state and law enforcement to identify and take action against fraudulent applicants, protect taxpayer money and ensure that legitimate applicants can access their benefits.

We notified affected cardholders of this action and encouraged them to contact us if they believe the credit should be reinstated."

Covant says he's been trying for weeks and getting nowhere.

"Why am I being caught up in this form of this now? There's emotions that go behind that. You feel... cheated, more or less," he said.

Serafino's $10,000 was replaced by the bank after his story aired. Now KGO-TV is working with the bank and state legislators to help Covant.

Originally posted on

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