A federal judge on Tuesday prohibited Bank of America from freezing accounts for California unemployment benefits based solely on an automated fraud filter and required it to do a better job of responding when jobless people say their benefits were stolen.
U.S. District Judge Vince Chhabria issued a preliminary injunction that was sought in a lawsuit by 15 jobless Californians who are among thousands who had their benefit debit cards frozen. Bank of America negotiated the terms of the order to prevent the unfreezing of debit cards on thousands of claims it or law enforcement has determined to be fraudulent.
“The court’s order provides substantial and immediate relief to hundreds of thousands of unemployed Californians,” said Brian Danitz, an attorney for unemployed people who sued the bank, in a statement. “The order prohibits the bank from freezing accounts based on a flawed fraud filter, requires the Bank to reopen unauthorized transaction claims it summarily denied, and requires the Bank to comply with the law by investigating those claims and providing provisional credit.”
The judge also ordered the creation of new customer service phone lines to help people whose accounts were affected by fraud.
Read the full story on LATimes.com.
