Senator Scott Wilk (R-Santa Clarita) took a solid swipe at eradicating unemployment insurance fraud and identity theft with the passage of Senate Bill 58 (SB 58) from the Senate Floor, which requires the Employment Development Department (EDD) to stop including full social security numbers on its correspondence.
SB 58 is one of three bills introduced by Senate Republicans to fix the mismanaged EDD. The other two bills are Senate Bill 39 (SB 39) by Senator Shannon Grove (R-Bakersfield) and Senate Bill 232 (SB 232) by Senator Jim Nielsen (R-Tehama). SB 58 previously passed the Senate Committee on Labor, Public Employees and Retirement and the Senate Committee on Judiciary with unanimous support and will now head to the Assembly where it will be considered in the appropriate assembly committees.
SB 58 stems from a 2019 State Auditor recommendation that EDD stop including full social security numbers on correspondence – an archaic and dangerous practice most government agencies and private companies no longer do because of fraud. The bill also requires EDD to identify ways to improve effectiveness of fraud prevention efforts during periods of high demand, and to designate a single unit responsible for detecting and coordinating fraud prevention. Both of these provisions are recommendations stemming from a 2021 State Auditor report on EDD’s Fraud Prevention methods.
“I was shocked to learn that EDD still includes full social security numbers on its correspondence, despite being warned by the State’s Auditor in 2019 that this practice increases the risk of fraud. Now thousands of unemployed Californians find themselves victims of fraud when it all could have been avoided,” said Wilk.
During the first 8 months of the pandemic, it is estimated that over $10.4 billion in potentially fraudulent claims were paid out, with more recent reports being as high as $30 billion by the end of the pandemic. During that same period, EDD mailed out 38 million pieces of mail containing full social security numbers, a three-fold increase from 2019, when the Auditor identified the risk.
“38 million piece of mail containing full social security numbers is 38 million opportunities for fraudsters to commit identity fraud. SB 58 ensures that the agency tasked with helping Californians during the time of their greatest need, does not result in them falling victim to identity fraud,” said Wilk.