EDD vows to crack down on fraud

San Francisco -  

The state Employment Development Department says it's cracking down on scam artists.

The agency is no longer automatically backdating new claims. They're also limiting multiple claims from the same address.

But Assemblyman Jim Patterson said, "That's going to block an awful lot of legitimate people from receiving their legitimate letters."

Patterson said he's concerned about unintended consequences created by an agency already criticized for delays and red tape.

He questioned whether the agency's moves are "an effort to make it much more easier on the EDD and its bureaucracy and making it much, much more difficult for california's unemployed."

Critics say the EDD is relying on outdated technology.

You use older technologies, hackers will always find a way to go through older technologies," said Howard Yee, an unemployed web developer who's been navigating the EDD phone tree.

"As far as I can tell, EDD hasn't changed its system for, easily, 20, 30 years," Yee said. 

And having an old system deal with today's problems, from fire- and unemployment-related claims to fraudsters, makes for a very busy agency.

But former EDD director Michael Bernick said the added security is a must and "shouldn't have a major impact."

 Bernick said the agency has to straddle carefully as it differentiates between claimants and con artists..

"There is that balance always in the system between the speed of processing and the fraud, opening it up to fraud,' Bernick said

It's no surprise the EDD is a juicy target for thieves. It's now paid more than $81 billion in benefits since March.

"It's been particularly heightened during the pandemic, just because of the money at stake," Bernick said.

Last month, the  San Mateo County sheriff's office implicated 21 jail and prison inmates - including those convicted of murder  - in a scheme to collect $250,000 in unemployment benefits.

"It's unusual in the sense that what you have now are much more sophisticated rings," Bernick said.