EDD now allows direct deposit for benefits

Unemployment, disability, and family leave recipients can now get their payments via direct deposit. The department announced the move this week.The direct deposit system is part of EDDNext, which the department describes as "an ongoing modernization effort to completely transform the EDD customer and employee experience."The move to direct deposit has been one pushed by both law enforcement and legislators due to the ease of fraud against the department with both debit cards and paper checks. The need for it came to a head in 2020 during the COVID-19 pandemic, when the department paid out more than $32 billion in fraud to scam artists. It was a perfect storm of problems where the issues inside EDD with paying out unemployment in a timely manner; the creation of a new federal program for freelancers called the Pandemic Unemployment Assistance Program (PUA) and lack of support or customer service for many years caused state leaders to push the department to turn off fraud prevention mechanisms.The lack of fraud-preventing chip technology on debit cards and the ease of stealing both cards and checks from mailboxes created a perfect storm of fraud against the department. Also, fraudsters realized just how easily they could push fake applications through the system using stolen identities, all while legitimate applications were stalled.The pandemic fraud was profiled in KCRA 3 Investigates' award-winning documentary "Easy Money: Fraud, Fortune and Failures."Since then, the department has had a new leader in Nancy Farias, who has spearheaded many of the changes, which include better fraud detection mechanisms and new technology. See more coverage of top California stories here | Download our app.