{"id":14276,"date":"2023-05-26T14:56:29","date_gmt":"2023-05-26T18:56:29","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/bofa-must-face-class-action-over-2020-benefit-card-fraud\/"},"modified":"2023-05-26T14:56:30","modified_gmt":"2023-05-26T18:56:30","slug":"bofa-must-face-class-action-over-2020-benefit-card-fraud","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=14276","title":{"rendered":"BofA must face class action over 2020 benefit card fraud"},"content":{"rendered":"
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\u00a9 Reuters. FILE PHOTO: A Bank of America logo is pictured in the Manhattan borough of New York City, New York, U.S., January 30, 2019. REUTERS\/Carlo Allegri<\/span>
\n<\/i>\n<\/div>\n

By Jody Godoy<\/p>\n

(Reuters) – Bank of America (NYSE:) must face cardholder allegations that it bungled its response to unauthorized transactions on unemployment and disability benefits cards in California during the pandemic, a San Diego judge ruled on Thursday.<\/p>\n

U.S. District Judge Larry Alan Burns said benefits recipients can move forward with a proposed class action lawsuit claiming the bank violated state law by issuing cards to millions of Californians that lacked standard security measures.<\/p>\n

The cardholders also claim Bank of America broke federal law by failing to investigate fraud claims or summarily freezing tens of thousands of accounts.<\/p>\n

A Bank of America spokesperson did not immediately respond to a request for comment on Thursday.<\/p>\n

The bank previously agreed to cease using automated fraud detection software to freeze accounts. <\/p>\n

Michael Rubin, an attorney representing the cardholders, called the ruling a “huge victory.”<\/p>\n

The cardholders claim Bank of America failed to follow the Electronic Fund Transfer Act, which sets rules for banks to resolve account errors.<\/p>\n

They also say the bank violated California’s consumer privacy law by issuing cards with outdated magnetic stripes, rather than chip technology, leaving them subject to fraud.<\/p>\n

Burns said they can move forward with those claims and others, including that the bank was a state actor that violated cardholders’ constitutional right to due process by freezing accounts without notice.<\/p>\n

The judge dismissed claims that the bank violated California’s Unfair Competition Law and that it breached its contract with the state.<\/p>\n

Last year, Bank of America paid $225 million to two U.S. regulators to settle claims that its fraud detection program improperly froze thousands of benefits accounts in 2020 and 2021.<\/p>\n

California estimated in 2021 that it had paid more than $111 billion in unemployment insurance benefits during the pandemic, with more than $10.4 billion in claims suspected to be fraudulent.<\/p>\n

The case is In re Bank of America California Unemployment Benefits Litigation, No. 21-02992, U.S. District Court, Southern District of California. <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. FILE PHOTO: A Bank of America logo is pictured in the Manhattan borough of New York City, New York, U.S., January 30, 2019. REUTERS\/Carlo Allegri By Jody Godoy (Reuters) – Bank of America (NYSE:) must face cardholder allegations that it bungled its response to unauthorized transactions on unemployment and disability benefits cards in […]<\/p>\n","protected":false},"author":1,"featured_media":5286,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-14276","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nBofA must face class action over 2020 benefit card fraud | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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