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SAN FRANCISCO (KPIX 5) -- Something very scary is happening to thousands of unemployed Californians who receive their government benefits through a Bank of America debit card - their accounts are getting drained by fraudsters.

Bank of America has an exclusive contract with the State of California to handle Employment Development Department (EDD) benefits through special debit cards. About a month ago, we started hearing from people who have lost thousands of dollars they desperately need.

My heart dropped. I was scared, you know, said Tatiana Solorzano, still traumatized by a hack attack that happened a month ago. I thought they were going to do it again!

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Solorzano, a single mother, receives her unemployment benefits through a Bank of America debit card and says a few weeks ago, there was a strange transaction on her account from another bank showing just zeros.

It happened the second day, then again the third day. Once it was the third day they were finally able to hit my account for $1, 003, said Solorzano. Rent was due October 2nd, you know, I was like, 'Oh my God, that money got pulled out right when my rent is due!'

Others we spoke to had the same thing happen. I went to the bank to withdraw money from my EDD account and it said I had reached my daily limit, said Brandon Birkhofer. He told us the fraudsters pulled money out of his account five days in a row - he's out $5, 000.

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Then there's Heather. She found out her debit card was compromised through a text message from Bank of America ... asking me if I had used my card in Las Vegas. Obviously I didn't, so I replied no, said she said.

Bank of America turned down our request for an interview but told us it is working closely with EDD in an aggressive effort to fight fraud. EDD didn't want to talk to us either but confirmed it knows of 350, 000 people whose EDD debit card accounts have been frozen due to suspected fraud.

The most likely scenario is that there was a data breach, said Steve Morang, a certified fraud examiner with San Francisco-based accounting firm Frank, Rimerman and Company.

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The fraudsters were able to capture the data of those cards, of those people, their accounts, the card numbers, and any other information they needed, in order to produce a duplicate card, said Morang.

He suspects a large criminal enterprise is behind the fraud attack, that appears to have involved ATMs all over Southern California and Nevada. This is a massive operation, because these are physical cards that have to be printed, and then somebody has to go to those ATMs everywhere, said Morang.

He says the fraudsters can buy your secret pin number on the dark web. And he says the EDD cards make stealing your information especially easy, because unlike regular debit cards, they don't have a chip.

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By having the chip, you have your information that's on the card encrypted in the chip and it makes it more difficult to duplicate the cards, said Morang. Whereas the magnetic strip, that's 30-, 40-year-old technology.

Bank of America gets paid from the state to take care of this, so the fact that we don't have a chip it just signals to me that we are not as important as their other clients, said Goertzen.

The victims we spoke to say filing a fraud claim with Bank of America made them feel like second-class citizens, because unlike regular bank customers they had to go through a separate department.

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I was on the phone for seven-and-a-half hours, disconnected every time. You get to the point where you are just exhausted, said Heather.

Even worse, just days after finally filing their fraud claims came letters from Bank of America that appeared to deny them, saying, Your claim has been closed because we believe your account has been the subject of fraud or suspicious activity.

That's not fair, because they really didn't look into my case, said Solorzano. It was the little bit of money that I did have left, that I was saving, it's all that I have.

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Since KPIX 5 submitted the names of 11 fraud victims to Bank of America the bank has applied credits to five of them, including everyone interviewed in this report. A spokesperson told us other claims will be assessed on a case-by-case basis.

Interestingly, when we asked Bank of America why the EDD debit cards don't have chips a spokesperson suggested we ask EDD. We are still waiting for a response from the state and will keep you posted.

Bank of America says there has been no data breach on their end and says it is working closely with EDD in an aggressive effort to fight fraud.

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Bank of America and EDD are asking any cardholder who is uncertain on why a debit to their account occurred to call the number on the back of their card (1.866.692.9374).We have changed the bank we use to issue your debit cards. As ofFebruary 15, 2024, benefits are no longer issued to a Bank of America debit card. Instead, they are now issued to a new Money Network prepaid debit card.

Important: If you still have a Bank of America debit card for your benefits, it will only be active until April 15, 2024.

Your payments were issued to your Bank of America prepaid debit card. We also mailed you a new Money Network Card (with no money on it yet) for future benefit payments. Your new Money Network Card should arrive in 14 business days. For example, if you qualified for a payment on February 5, allow until February 23 to receive that new Money Network Card. It will be in a plain, white, letter-sized envelope from the Employment Development Department with an Omaha, Nebraska (NE) return address.

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The Money Network Mobile App is a convenient and secure way to keep track of your money with options like mobile check deposit, fingerprint/touch ID and card lock features, account alerts, budgeting tools, and so much more. For a complete list of app features, visit Money Network Mobile App.

We will never request your personal information by text message, email, or on social media. Text messages asking you to activate a debit card by selecting a link are scams. text messages only link to websites that include “”. Visit Help Fight Fraud for tips on how to avoid scams.

We issue your benefit payments on a debit card that’s fast, convenient, and secure. Plus, there’s no credit check and we don’t monitor your transactions. With the new Money Network prepaid debit card, you can:

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Once your card is activated, you can use it like you would a personal debit card. Buy groceries, pay bills, get cash back, and more.

If you lose your card, lock it while you look for it. To lock your card, log in online or download the Money Network Mobile App. If your card is permanently lost or stolen, call 1-888-913-0900. For more information, visit Lost or Stolen Cards.

For more help, you can speak with a Money Network Customer Service representative 24 hours a day, 7 days a week by calling one of the following phone numbers:

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You will receive important information with your card. Be sure to read all information including fees for the debit card. For digital wallets, view your Cardholder Agreement (PDF).

Last day to request and be issued a replacement card, if your card is lost, stolen, expired, or scheduled to expire before March 31.The Employment Development Department () is contacting unemployment, disability, and Paid Family Leave customers with timelines and information to assist in the transition from Bank of America debit cards to Money Network prepaid debit cards.

Starting January 15, customers who qualify for payments will receive a payment issued to their Bank of America debit card as well as be sent an unfunded Money Network Card. Beginning February 15, benefit payments will be issued to the Money Network Cards and no longer to Bank of America debit cards. A new direct deposit option will also be added later this year.

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The asks customers to allow up to 14 business days for that unfunded Money Network Card to arrive. For example, if an individual qualified for a payment on January 15, allow until February 1 to receive that new Money Network Card. Individuals who don’t receive their card after that period may contact Money Network at 1-800-684-7051.

The cards will arrive in a plain, white, letter-sized envelope from the with an Omaha, Nebraska (NE) return address since that is where the cards are manufactured.

Important details on what the ’s customers should expect throughout this transition are being delivered through personal emails and text messages in late January. The messaging follows letters, emails, and text messages sent in early December to all active customers at the time advising them of the upcoming change and key dates involved.

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IMPORTANT DEADLINE: April 15, 2024, is the last day individuals will be able to use their Bank of America debit card.

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