improvement over what was presented by the plaintiffs in support of their motion. The hardship

Summary

A preliminary injunction entered by United States District Judge Vince Chhabria in Jennifer Yick, et al. v. Bank of America, N.A., Case No. 21-cv-00376-VC, in the U.S. District Court for the Northern District of California, dated June 2, 2021, re Dkt. Nos. 64, 100. The court adopts language the parties crafted with Magistrate Judge Kim and finds the hardship to the Bank outweighed by the benefits to class members. The order bars the Bank from relying on its automated Claim Fraud Filter in resolving unauthorized transaction claims on prepaid debit cards for EDD unemployment or disability benefits, or in freezing class members' accounts. It requires the Bank to reopen claims closed solely on that filter, send written notices, and set up dedicated toll-free Claims Initiation and Fraud Call Centers with staffing standards. No bond is required.

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Full text

                               UNITED STATES DISTRICT COURT

                           NORTHERN DISTRICT OF CALIFORNIA


  JENNIFER YICK, et al.,                            Case No. 21-cv-00376-VC
                 Plaintiffs,
                                                    PRELIMINARY INJUNCTION
          v.
                                                    Re: Dkt. Nos. 64, 100
  BANK OF AMERICA, N.A.,
                 Defendant.



       With the assistance of Magistrate Judge Kim, the plaintiffs and defendants worked

together to craft preliminary injunction language that is designed to protect the class members

from future harm while minimizing disruption to the defendant’s operations. This language is an

improvement over what was presented by the plaintiffs in support of their motion. The hardship

to the defendant from this injunction is outweighed by its benefits to the class members. The

injunction is also in the public interest. Accordingly, in accordance with the language submitted
by the parties, and for the reasons discussed in the order issued on May 17, 2021:

       Bank of America, N.A. (the “Bank”), and the Bank’s officers, directors, agents,

employees, representatives, and all persons acting under, in concert or participation with, or for

them (“Defendant”) are preliminarily enjoined in the administration of prepaid debit cards for

Employment Development Department (“EDD”) unemployment or disability benefits issued by

Defendant to members of the certified class as follows:

       (1) Defendant shall be prohibited from considering the results of the Bank’s initial

automated claims fraud filter (Claim Fraud Filter) in investigating or resolving unauthorized
transaction error claims (see 12 C.F.R. 1005.11) (Claims).
       (2) a. Defendant shall be prohibited from denying or closing Claims or denying

provisional or permanent credit to claimants’ accounts without conducting and concluding an

investigation into the alleged unauthorized transaction, pursuant to EFTA and Regulation E.

           b. Defendant shall be prohibited from denying or closing claims without providing

the claimant a written explanation of the findings of its investigation, pursuant to EFTA and

Regulation E.

       (3) Defendant shall not consider the results of the Bank’s Claim Fraud Filter as a basis

for freezing card accounts of any Class Member.

       (4) a. Beginning ten (10) days after the entry of this Order, Defendant shall reopen any

Claim that it closed or denied based solely upon the results of its Claim Fraud Filter and that it

has not previously paid or previously reopened and investigated (Previously Closed Claim).

Defendant may stagger the reopening of such Claims in roughly equal amounts over thirty (30)

additional days.

            b. For Previously Closed Claims filed by a class member who has not yet

authenticated their identity through either EDD (in the knowledge of the Bank) or the Bank,

Defendant shall, within ten (10) days of reopening, and thereafter at least weekly for five weeks,

send the class member a written notice (by mail and email, if available) explaining the basis for

the original denial; that the claim has been reopened; what steps they need to take to authenticate
their identity (which may include presenting identification at a Bank branch or by calling the

dedicated toll free number for the Fraud Call Center referred to in paragraph 9); that if they do

not authenticate their identity within 45 calendar days of the original notice, the claim will be

denied; and that if they authenticate their identity, the Bank will commence and complete the

investigation and resolve the claim within 45 calendar days of the authentication and, if such

claim has not been resolved within 10 business days of the authentication, provide provisional

credit in the amount of the alleged error(s) to the account. Persons subject to this Paragraph 4(b)

are subject to Paragraph 5(a) if they authenticate.
       (5) a. For Previously Closed Claims that were filed by a class member who has


                                                  2
authenticated their identity through either EDD (in the knowledge of the Bank) or the Bank,

Defendant shall complete the investigation and resolve the claim within 45 calendar days of the

entry of this Order (or of the date the class member authenticates their identity, if later) and, if

the claim has not been resolved within 10 business days of the entry of this Order (or of the date

the class member authenticates their identity, if later), provide provisional credit in the amount of

the alleged error(s).

        b. For any Previously Closed Claims that were filed by a class member who has

authenticated their identity through either EDD (in the knowledge of the Bank) or the Bank, but

the Claim has never been reopened, Defendant shall reopen such Claim within ten (10) days of

the entry of this Order and Defendant shall complete the investigation and resolve the claim

within 45 calendar days of reopening and, if the claim has not been resolved within 10 business

days of reopening, provide provisional credit in the amount of the alleged error(s).

        (6) In addition to Claims that Defendant reopens pursuant to paragraphs 4 and 5(b),

Defendant shall, upon request from the affected cardholder, reopen any Claim that it closed or

denied on or after January 1, 2020.

        (7) Within 10 days of the entry of this Order (by mail and email, if available) or after the

date of the blocking (by mail, within three (3) business days, and email, if available, within one

(1) business day), whichever is later, Defendant shall give written notice to class members whose
accounts are blocked solely based upon its Claims Fraud Filter that explains that the Bank will

promptly unblock their account if the class member authenticates their identity. The written

notice shall explain: the basis for the previous block; what steps the class member needs to take

to authenticate their identity (which may include presenting identification at a Bank branch or by

calling the dedicated toll free number at the Fraud Call Center referred to in paragraph 9); that if

they do not authenticate their identity, their account will remain blocked or will be closed; and

that they have the right to ask EDD to issue future benefits payments by paper check instead of

by the Bank Debit Card.
        (8) Defendant shall:


                                                   3
       a. As soon as practicable, and in no event later than twenty (20) days of the entry of this

Order, establish a dedicated toll-free number to enable class members to directly reach the

Claims Initiation Call Center, which shall be staffed by customer service representatives (CSRs)

who are trained to handle Claims intake;

       b. Within thirty (30) days of the entry of this Order, the Claims Initiation Call Center

hours to receive calls shall consist of at least fourteen (14) hours on weekdays and ten (10) hours

on Saturdays, which shall be expanded within forty-five days of the entry of this Order to include

ten (10) hours on Sundays, and expanded within sixty days of the entry of this Order to include

24 hours per day, 7 days per week coverage; and

       c. As soon as practicable after the establishment and successful testing of the dedicated

toll-free number for the Claims Initiation Call Center, but in no event later than ten (10) days

thereafter, and at least monthly thereafter, provide written notices (by mail and email, if

available) to all class members regarding the available toll free number and providing the

information in paragraphs 6, and (8)(a) and (b).

       (9) Defendant shall:

       a. As soon as practicable, and in no event later than twenty (20) days after the entry of

this Order, establish a dedicated toll-free number to enable class members to directly reach the

Fraud Call Center, which shall be available 24 hours per day, 7 days per week, and which shall
be staffed by CSRs who are trained to authenticate identity and resolve challenges to blocked

accounts.

       b. As soon as practicable after the establishment and successful testing of the dedicated

toll-free number for the Fraud Call Center, but in no event later than ten (10) days thereafter, and

thereafter at least weekly, provide written notice (by mail and email, if available) to all class

members whose accounts are blocked of the availability of this dedicated toll-free number.

       (10) Defendant shall, within 20 days of the entry of this Order:

       a. Staff the Claims Initiation Call Center and Fraud Call Centers, such that the average
speed to answer calls from Class Members for these centers is no more than five minutes, 90% of


                                                   4
the time, separately measured for the Claims Initiation and Fraud Call Centers and based on all

callers to such centers (rather than just calls by Class Members).

         b. Train and require CSRs in the Claims Initiation Call Center to request email contact

information from a claimant at the time a claim is filed (if email is not already available for that

claimant), so that the Bank may use that information to contact the claimant regarding

authentication, if and to the extent this is consented to by EDD.

         c. Train and require CSRs in the Fraud Call Center to immediately inform cardholders

who are unable to authenticate their identity by phone that they have the option of authenticating

their identity at a Bank branch.

         (11) Within 10 business days of the entry of this Order, Defendants shall provide email

and mail notice to all Class Members of their rights under paragraphs (1) through (7) of this

Order.

         (12) Paragraphs 2 and 4 of this Order shall not apply to,

         a. Claims made with respect to accounts that EDD has found to be disqualified or not

entitled to benefits, or has requested an account freeze; or

         b. Claims made with respect to accounts that Defendant has frozen or blocked based on

(i) receipt of legal process or (ii) information provided or made available by law enforcement, or

(iii) the outcome of an investigation of suspicious facts and circumstances related to an
individual cardholder developed independent of the Claim (if such cardholder has been sent a

notice that the action has occurred and a statement of what the cardholder can do in response).

         Defendant shall implement the requirement of paragraph 1 as soon as practicable but in

no event more than seven (7) days from the entry of this Order.

         There shall be no bond required.

         IT IS SO ORDERED.

Dated: June 2, 2021
                                               ______________________________________
                                               VINCE CHHABRIA
                                               United States District Judge



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