An EDD Update

By Mary O’KEEFE

In September 2020 CVW reported on a reader who had received over 150 fraudulent letters from EDD – the California Employment Development Department – at his residence. The letters were addressed to different names but all had the reader’s address. This scam occurred in areas throughout California and the EDD was not quick to respond to the issue, either from our repeated attempts to contact the agency nor when the reader attempted to contact EDD to ask what to do with the fraudulent mail. In early January the EDD suspended payments of over one million benefit claims in part due to their fraud response. This left many legitimate applicants without funds.

This week, EDD provided an update on the department’s efforts to “get unemployment benefits to struggling Californians while stopping fraud committed against the unemployment system,” according to an EDD statement.

According to EDD, the department has processed 19.5 million claims between March 2020 and Jan. 16, 2021. EDD has confirmed that 9.7% of those payments had been made to fraudulent claims. In addition, up to 17% of payments made during this time have been identified as possibly fraudulent.

“EDD is now working with some of the country’s most successful fraud prevention businesses and law enforcement agencies to protect the state’s unemployment benefit system,” stated California Labor and Workforce Development Agency Secretary Julie Su. “We know that many Californians are waiting on payments, and EDD is working quickly to validate their claims and get their benefits to them.”

The EDD has received over five times as many unemployment claims in 2020 that in 2010, the worst full year of the Great Recession. This unprecedented number of claims provided a “window of opportunity” for thieves, stated EDD.

“EDD was clearly under-prepared for the type and magnitude of criminal attacks and the sheer quantity of claims,” said EDD Director Rita Saenz. “We are focused on making the changes necessary to provide benefits to eligible Californians as quickly as possible and stopping fraud before it enters the system.”

In 2019, fraud accounted for about 6% of California’s total Unemployment Insurance payments. There have been arrests made throughout the state and nation concerning EDD fraud, including arrests by Glendale police.

California elected officials have been hearing from constituents concerning the fraud and the suspended payments.

“Something is terribly wrong here. While President Biden sends $2.6 billion to California for rent relief, EDD sent over four times that amount ($11 billion) to fraudsters,” said Assemblymember Miguel Santiago. “We could’ve paid rent, utility bills and invested in vaccine rollout. Instead EDD blew it. Every day my office receives desperate constituent calls worried about paying rent, bills and putting food on the table. COVID-19 has widened income inequality and it’s been worsened by EDD’s inability to send unemployment checks. EDD deserves a big fail on its report card.”