Mary Alexander & Associates Files Class Action Lawsuit Against Bank of America for Inadequate Protection for Unemployed Californians

In February of 2021, Mary Alexander & Associates filed a class action lawsuit in federal court in San Francisco on behalf of thousands of Californians against Bank of America. The class action alleged the nation’s second largest bank, formerly headquartered in San Francisco, failed in its duty to properly protect their unemployment benefits.

The California Employment Development Department (EDD) has an exclusive relationship with Bank of America (BofA) to administer benefits through the use of BofA issued debit cards. The complaint claims BofA was required to provide secure accounts for unemployment payments to individuals. The complaint goes on to allege BofA failed to provide even the most basic cyber-security measures. Because of BofA’s failure, tens of thousands of Californians lost their EDD income due to fraudulent transactions and hacked accounts.

The complaint alleges BofA didn’t respond or assist many of the cardholders who claimed they were the victims of fraud. Even though the bank has a “zero liability” policy, BofA failed to protect cardholders. The bank’s poor response included:

  • Freezing cardholder accounts with no warning or explanation;
  • Providing little to no telephonic support on its customer service line for EDD cardholders;
  • Quickly closing claims that were opened (without proper investigation); and
  • Not extending provisional credit to these EDD cardholders.

The lawsuit also claimed BofA violated the California Consumer Privacy Act, California’s Unfair Competition Law, and Regulation E of the federal Electronic Funds Transfer Act. The suit claimed BofA breached its contract with EDD cardholders and failed to warn EDD cardholders about the risks associated with its EDD debit cards. The suit also alleged BofA negligently performed its contract with EDD, among other violations of law.

“The events of 2020 were hard enough without Bank of America making life even more difficult for California’s unemployed,” said attorney Mary Alexander. “These are hard-working people who were unable to pay rent, heat their homes or put food on the table due to Bank of America’s negligence.”

The lawsuit is Cajas v. Bank of America, N.A, Case No. Case 3:21-cv-00869, in the U.S. District Court for the Northern District of California. To read the complaint, click here.