A new bill, SB 58, to mandate specific fraud prevention measures at the Employment Development Department (EDD) has been passed unanimously by two Senate Committees, heralding what proponents hope will be a new era of EDD claimant security.
“During the first eight months of the pandemic EDD sent nearly 40 million pieces of mail with claimants’ full social security numbers, leaving the state open to fraudulent claims and jobless Californians at risk of identity theft. By ignoring the state auditor’s 2019 recommendations to remove social security numbers from its forms, the agency left taxpayers on the hook for an estimated $30 billion – more than $10.4 billion of it being in fraudulent claims to convicted felons, killers, and scammers. If Governor Newsom’s EDD won’t protect Californians, Republicans will. It is time for real solutions and my legislation will protect unsuspecting Californians from identity theft,” Senate Republican Leader Scott Wilk, R-Santa Clarita, told the Northern California Record by email.
The legislation would require EDD to stop including full social security numbers on its correspondence among other fraud prevention improvements.
“We first recommended this in March 2019 to reduce the risk of identity theft to claimants,” Margarita Fernández, California State Auditor Chief of Public Affairs & Quality Assurance, told the Record by email. “We recognized this would take some time and thus recommended they prioritize addressing those documents with highest mail volumes and should make those changes to those documents by March 2020. But they did not. They made changes to some documents, but did not focus on the documents with highest volumes and thus, EDD had sent at least 38 million pieces of mail containing claimants’ full SSNs since the start of the pandemic.”
A recent Deadline report noted the EDD has continued to face a litany of problems, including system outages.
SB 58 would also require the EDD to use existing resources to create a central unit responsible for coordinating fraud prevention – a recommendation also contained in the state Auditor report issued in January.
“Mailing documents containing social security numbers put Californians at risk of identity theft,” Fernández told the Record. “Additionally, EDD was unprepared to deal with the surge in claims and assist Californians who were unemployed during COVID-19 shutdowns and they paid billions of dollars in improper payments due to their weaknesses in fraud prevention.”
An EDD spokesperson was not available to provide a response to the Record’s request for comment.
A news release from Wilk’s office notes that SB 58 is now before the Senate Appropriations Committee, where a hearing is expected to take place this month.