Carie Mathis’ cleaning business collapsed when the pandemic began. The single mother was unemployed to support herself and her 15-year-old twin sons, but was unable to pay the rent on the house in Rodeo. They moved in with her parents in Vacaville. It has a bunk bed in the garage for children to have rooms.
In December, his unemployment insurance was suddenly suspended. “Every little recipe that … was coming in has been interrupted,” she said. She spent hours unsuccessfully calling the California Department of Employment Development. On New Year’s Eve, she finally received an email explaining that she was among 1.4 million accounts that the state had frozen due to suspected fraud.
The consequences of the massive suspension of EDD accounts continue to affect unemployed people who are desperate to have their benefits restored. The agency has been sending emails and letters telling complainants how to prove their identity, but is doing it in batches to avoid overloading its systems. EDD told lawmakers that it may take until mid-February to complete the authentication of suspended accounts.
Even those who have been notified are struggling. Mathis spent hours sending identity documents online, calling EDD and sending them again.
She is reduced to asking her parents for money for the grocery store and worried about losing “everything under the sun that is close and dear to my heart” if she cannot pay for her deposit. She set up a GoFundMe for help.
“I go to bed at night and my head turns like, ‘When is it going to stop?'” She said.
“I have no words to describe my frustration with this situation,” said State Assembly member David Chiu, D-San Francisco. He said he is working with other lawmakers on bills to reform the EDD and investigate its problems with scammers. “I suspect that the level of fraud made them feel that they needed to close the emergency door for everyone,” he said. He still blamed the agency for not being “more discerning” about those seeking benefits.
“It is unfair that EDD cannot distinguish between legitimate applicants who have a job history and those who are making things up as they go,” said Assembly Member Jim Patterson, R-Fresno. “Despair is heartbreaking.”
As the frustration builds, the CEO of the outside company that verifies the identities of the complainants says his company is working as fast as possible to help genuinely unemployed people and eliminate armies of fraudsters looking to divert billions of dollars from California.
“You have Russians, Chinese, Nigerians, Ghanaians and even domestic criminals who are attacking this agency on a large scale,” said Blake Hall, CEO of ID.me. “And these state actors and organized crime groups … keeping them at a distance and, at the same time, helping legitimate people is really difficult, and now organized crime is across the state.”
EDD hired ID.me in October after a task force convened by Governor Gavin Newsom blamed the agency for its slowness in handling complaints. The McLean, Va., Company does identity verification for unemployment systems in 14 states, as well as other government agencies. ID.me said it checks nearly 2 million people a month across the country.
ID.me said it checked 847,289 California claimants from October 1 to January 12 and blocked 488,308 fraudulent claims in the state.
Hall said his automated self-service process can handle about 88% of people, while the rest must undergo video chat verification. People who don’t have computers to check online are referred back to EDD, he said.
Social media is flooded with stories of people waiting five hours or more for ID.me’s video chats, although Hall said the normal waiting times are 30 minutes to two hours. He said the company is hiring about 40 new employees to video chat each week.
“Unfortunately, this influx of fraud and claimants is contributing to longer waiting times for legitimate claimants,” he said. “Users who encounter problems tend to wait for benefits for weeks and months and take that frustration out on us, which is understandable.”
Others say they have completed the ID.me verification without having their benefits reinstated.
“I followed everything I was supposed to do, and I’m still out of benefits, (although) said ‘Congratulations, you’ve been verified'” two days earlier, Mathis said Thursday.
Hall said account restoration is an issue for EDD.
The agency did not respond to questions. He sent a statement that said, “As claimants have their identities verified, EDD is removing barriers on claims so that payments can continue for qualified claimants – something that can happen in a matter of days.” Claimants should continue to make sure of their benefits while their accounts are suspended to minimize future delays, he said.
Shelly Ross’ pet sitting company, Tales of the Kitty, has seen business implode. She dismissed herself and most of her 14 employees, opening a GoFundMe account to help her employees.
She also saw her benefits suspended in December and spent hours trying to call EDD. On Friday, she finally received a message asking her to verify her identity with ID.me, which she did – but her account remained frozen.
“I’m not sure I will be able to pay my rent in February,” she said.
On Friday, Bank of America, which issues the debit cards used for EDD benefits, was sued for allegedly not sufficiently protecting scammers’ unemployment benefits.
“Bank of America failed to protect EDD debit card holders’ accounts and then failed to deal with fraud complaints when made,” said Brian Danitz, a partner at Cotchett, Pitre & McCarthy, in a statement. “Hundreds of millions of unemployment benefits in California have already been lost to fraud.”
Bank of America mentioned comments from EDD that it did not ask the bank to include chip technology on debit cards.
“Bank of America is working every day with the state to prevent criminals from receiving money and to ensure that legitimate beneficiaries receive their benefits,” the agency said in a statement. While most scams occur through fake apps, he said, “when fraudulent benefit card transactions occur, we review these claims and return the money to legitimate recipients”
Mathis summed up the despair that many isolated people are feeling.
“Although there was a pandemic and the children were studying at home and the world was in the state it is in, I still had hope,” she said. “I was saving money. We had a home that I could get. Now I’m in limbo and I don’t know what to do. “
Carolyn Said is a writer for the San Francisco Chronicle. Email: [email protected] Twitter: @csaid