SACRAMENTO—At least 350,000 debit cards filled with money for unemployment benefits in California have been frozen because of suspected fraud, state officials said, revealing how prevalent the problem has become now that the state has paid more than $105 billion in benefits since March.
The Employment Development Department said the debit cards were frozen for several reasons, including “a high number of claims at a single address.” The agency said the claims were part of the federal Pandemic Unemployment Assistance program, which offers unemployment benefits to people who would not normally be eligible to receive them, including independent contractors, the Associated Press reported.
Fraud has been a concern at the agency for months as it was hit by an overwhelming number of claims after Gov. Gavin Newsom ordered most businesses to close to slow the spread of the coronavirus. The agency has processed 15.2 million claims since March, or about four times the 3.8 million claims processed in 2010, the worst year of the Great Recession, the AP said.
More than 1.1 million people are still waiting to receive benefits, a backlog that agency officials say won’t be cleared until January. The agency has had to balance pressure from lawmakers and the public to process claims faster while still taking time to root out fraud, the AP noted.