Senate Republican Leader Wilk Announces that His EDD Fraud Prevention Bill Clears First Hurdle in State Assembly

SACRAMENTO – Senate Republican Leader 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 Assembly Committee on Privacy & Consumer Protection. SB 58 would require the Economic Development Department’s (EDD) to stop including full social security numbers on its correspondence.

SB 58 stems from a 2019 State’s 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 issues with fraud. The bill also requires EDD to identify fraud prevention efforts it can adjust to improve effectiveness during periods of high demand for benefits, and to designate a single unit responsible for coordinating fraud prevention and align the unit’s duties with best practices for detecting and preventing fraud. Both of these provisions are recommendations stemming from a 2021 State Auditor report on EDD’s Fraud Prevention methods.

During the first 8 months of the pandemic, it is calculated that over $10.4 billion in potentially fraudulent claims were paid out, with more recent estimates 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 identity fraud against Californians, SB 58 ensures that the agency tasked with helping Californians during the time of their greatest need, does not put them at risk of falling victim to identity fraud,” said Wilk.”

SB 58 is one of three bills introduced by Senate Republicans to reform EDD:

• SB 58 previously passed the Senate Floor, Senate Committee on Labor, Public Employees and Retirement and the Senate Committee on Judiciary with unanimous support. The bill will now head to the Assembly Committee on Insurance. SB 58 is coauthored by the entire Senate Republican Caucus.
• Senate Bill 39 (SB 39) by Senator Shannon Grove (R-Bakersfield) would require the Department of Corrections and Rehabilitation to cross-reference prisoner records with EDD, also passed the committee. SB 39 also passed out of the Assembly Privacy and Consumer Protection Committee and will also head next to the Assembly Insurance Committee.

Senate Bill 232 (SB 232) by Senator Jim Nielsen (R-Tehama) would codify a number of audit recommendations, including requiring the implementation of a recession plan, is awaiting a hearing in the Assembly Committee on Insurance