California, United States. / 07.23.2021 18:40:36
California strengthen the security of the debit cards you use to issue unemployment insurance and other benefits following a wave of fraud since last year during the unemployment benefits for covid-19, according to an announcement from the state Employment Development Department (EDD).
The state agency plans to work with Bank of America to start implement chip-enabled debit cards for new applicants, as well as for those needing replacements, beginning July 25, the department said in its announcement Thursday.
The news comes about a week after an investigation by the portal CNBC highlighted the lack of chips on many government cards, which contributed to the theft of unemployment insurance for more than 100,000 beneficiaries during the pandemic.
“Chip cards can help safeguard in-person point-of-sale transactions where the card is used at a terminal,” the EDD said in a statement.
Additional benefits when using the new chip card
The new chip cards too will be used for disability insurance and paid family leave benefits as of July 25, the department reported.
Bank of America He was hired by the state a couple of years ago to help distribute profits, almost entirely through debit cards. A class-action lawsuit in California accuses the institution of failing to “take reasonable steps to protect profits from fraud.” The complaint said that the lack of chip technology to “prevent fraud” on the plaintiffs’ cards made them “easily susceptible to cloning.”
Scammers can use duplicate cards to steal cash from people receiving unemployment benefits, research found CNBC.
California recently extended its contract with Bank of America; however, the firm said it “would like to get out of this business as soon as possible.”