San Francisco – June 1, 2021 Judge Vince Chhabria (N.D. Cal.) today issued a groundbreaking preliminary injunction order in nine consolidated class action cases against Bank of America, in which Altshuler Berzon LLP serves as interim lead co-counsel.
In Yick v. Bank of America, N.A., plaintiffs contend that the Bank violated the rights of hundreds of thousands of Californians whose unemployment insurance benefits were paid through Bank-issued debit cards. Although state and federal law require the Bank promptly to investigate cardholder claims of unauthorized transactions on their accounts and to provisionally credit those stolen funds to the cardholders if the investigations cannot be completed within 10 business days, plaintiffs contend that the Bank denied cardholders’ claims and froze their accounts without the required investigation, based solely on the Bank’s use of a flawed and highly unreliable initial “Claim Fraud Filter” that erroneously identified tens of thousands of legitimate UI cardholders as criminals using stolen identities. Legitimate cardholders who were erroneously flagged by the Bank’s “Claim Fraud Filter” were promptly cut off from access to their past, present, and future UI benefits, and plaintiffs contend that the Bank made it nearly impossible for those cardholders to regain access to their benefits accounts.
The Court’s preliminary injunction prohibits the Bank from continuing to deny unauthorized transaction claims or to freeze cardholder accounts based on the results of the Bank’s Claim Fraud Filter, and further prohibits the Banks from in any way using the results of the Claim Fraud Filter in investigating unauthorized transaction claims or deciding whether to issue claimants provisional or permanent credit. The order also requires the Bank to reopen all claims that the Bank previously denied based on the results of the Claim Fraud Filter, to give those individuals a prompt opportunity to authenticate their identities, and to issue provisional credit pending investigation to anyone who authenticates their identity if the Bank does not complete its investigation within 10 business days. In addition, the order requires the Bank to expand its customer service hours and establish dedicated toll-free hotlines to assist class members with their unauthorized transaction claims and with unblocking their accounts.
Altshuler Berzon LLP attorneys Michael Rubin, Stacey Leyton, Connie Chan, Matthew Murray, and James Baltzer are co-counsel in this case, along with attorneys from Cotchett, Pitre & McCarthy LLP and others.