EDD halts payments amid fraud problems

A widening fraud problem has prodded the state Employment Development Department to suspend unemployment payments to many California workers at the same time corona virus-linked business shutdowns have left people without a job.

The halt in payments for an unspecified number of workers in the state comes at a time when the EDD is reporting that a backlog of unpaid unemployment claims has again begun to swell.

The brutal bottom line: Many California workers now face suspended unemployment payments due to fraud concerns, a logjam of unpaid legitimate claims, and a loss of work because state and local agencies have imposed business closures to help combat the spread of the coronavirus.

“As part of ongoing efforts to fight fraud, EDD has suspended

payment on claims considered high risk,” the EDD stated in a tweet posted on Jan. 3.

The EDD appears to be scrambling this week to hire hundreds of phone agents quickly, according to a tweet that was posted on Jan. 3, just a few hours after the disgraced state agency revealed its decision to halt unemployment payments.

The state agency has begun to solicit quotes for services with the quotes due by 8 a.m. on Wednesday, Jan. 6, the EDD tweet stated.

“This Request for Quotation (RFQ) is for a contractor to provide a team of 300 phone agents to assist EDD customers,” the EDD tweeted.

Multiple people responded to the EDD tweet and posted screenshots of a message they received when they logged into their respective accounts on the EDD website.

“You have been receiving unemployment benefits, but we have temporarily suspended your claim because it may be tied to fraudulent activity,” the EDD told multiple workers who were seeking information on the state agency’s website about their payments.

At the same time, the EDD efforts to whittle away a mammoth backlog of unpaid legitimate claims appear to have floundered. The setback has left a growing number of California workers trapped in the EDD’S bureaucratic limbo.

In September, the EDD vowed it would have erased the backlog of jobless claims by the end of January.

However, with the backlog now increasing yet again, it wasn’t immediately clear if the EDD would be able to follow through on its promise.

The total number of unemployment claims that are stuck in the EDD backlog was about 777,800 for the week that ended on Dec. 30.