The Brief

Kim Tanner didn’t expect to become a fraud detective when she filed for disability with the California Employment Development Department.

But in mid-July, $3,161 vanished from her online account with the state’s new debit card contractor, Money Network, according to Tanner’s complaints to government regulators. Someone had gotten access to her online debit card account, added a new bank account and transferred out her money, all without any notifications, she wrote in the complaints.

Tanner said Money Network told her it could take 90 days to investigate, and that she may or may not get a full refund, leaving her short on rent money. She turned to social media and saw similar horror stories on Reddit and Facebook. “My head exploded,” Tanner said. “This was happening to tons of people.”

So she started filing complaints. First with Money Network, its parent company Fiserv and the EDD. Then with a state senator and a half-dozen financial regulators.

“It just went on and on and on,” said Tanner, who got her money back via paper check about a month and a half later, after a federal agency intervened. “This needs to be investigated.”

A CalMatters investigation a year ago exposed how the EDD’s unemployment system crashed during the pandemic, the result of historic job losses, years of missed warning signs and poor contractor performance. As a result, the system at first failed to stop widespread fraud, then cut off access to millions of real people who used it as a crucial lifeline.

Now, even with a new payment contractor in place, concerns about fraud linger for people who rely on unemployment and disability programs run by the EDD. Multiple lawsuits and 74 federal consumer complaints about government debit cards have been filed by Californians against Money Network this year alone. The EDD and the company say the debit card fraud is smaller scale than the varied forms of fraud during the pandemic.

On top of the fraud complaints, a report released Monday by the Legislative Analyst’s Office warns that lawmakers are failing to address a bigger unemployment problem: a “broken” financial model, one that threatens the whole system.

California’s unemployment fund is still $20 billion in debt to the federal government after the state took out loans to cover pandemic benefits, costing taxpayers $1 billion in annual interest — more than the state spends on child welfare. Now, after years of ignoring calls to modernize the state’s 1980s-era unemployment tax code, the system is on track to lose $2 billion a year as it fails to bring in enough revenue to cover unemployment expenses, according to the report.

The Legislative Analyst’s Office, which provides fiscal and policy advice to state lawmakers, says the state needs to bring unemployment taxes in line with other states to cover the deficit.

“This is entirely avoidable,” said LAO policy analyst Chas Alamo.

Kim Tanner scrolls through the “MoneyNetworkFraud” subreddit on her computer. The California Employment Development Department contracted Money Network to handle debit card payments after the agency faced scammers and hackers during the pandemic. Oct. 11, 2024.

(

Photos by Adriana Heldiz

/

CalMatters

)

The recommendations could force a reckoning for lawmakers caught between business and labor advocates. Business groups have fought tax increases, favoring California’s current lowest-in-the-nation unemployment tax base. Labor groups argue that taxes must go up to stabilize the system. Then, they say, lawmakers should evaluate measures to expand which workers are eligible for unemployment or raise California’s $450-a-week maximum payment, which is also lower than many other states.

What happens next will be one test of how legislative leaders respond to voters’ rebuke of Democratic leadership nationwide, with the Legislature’s Democratic leadership pledging to do more to make California a less expensive place to live.

Meanwhile, the EDD has already secured funding for an unprecedented five-year, $1.2 billion effort called EDDNext to finally modernize the call centers, software and websites that power the state’s job safety net — a more ambitious version of past modernization efforts that crumbled during the pandemic.

Whether or not history will repeat itself is complicated by unanswered questions about what went wrong at the EDD during the pandemic and how the state scrambled to recover.

Former California labor chief Julie Su went on to become acting U.S. labor secretary and one of the longest-unconfirmed presidential nominees in history, thanks in part to criticism over unemployment fraud.

Gov. Gavin Newsom’s administration has denied CalMatters’ repeated requests for internal records from this period, citing an exemption that allows the governor to keep his communications secret if he chooses.

The fraud factor

During the pandemic, a wide range of fraud schemes hit the unemployment system at once. Global hackers used large-scale identity theft. Low-level social media scammers and prison inmates adopted fake names to file for benefits under emergency federal programs that waived normal identity checks. Debit card scammers cloned insecure EDD cards then run by Bank of America and drained the accounts.

Millions of real California workers got caught up in the mess, state audits found. Some saw their EDD accounts flagged as suspicious due to clerical errors, communication failures or faulty fraud software. Laid-off workers saw EDD debit cards overdrawn by thousands of dollars or cut off as the bank and the state scrambled to rein in fraud.

California and other states were partially let off the hook when the federal government agreed to absorb the bulk of the billions lost to fraud in emergency programs. After Bank of America pulled out of the unemployment business last year, the EDD tried to turn the page on debit card fraud by hiring Georgia finance tech company Money Network to take over.

The scope and details of the current fraud that workers allege isn’t clear. State auditors and financial regulators haven’t analyzed it; lawsuits and regulatory complaints only show that money disappeared from workers’ accounts, not how it was taken.

The Consumer Financial Protection Bureau, which previously fined Bank of America $100 million over what it called “botched” pandemic unemployment payments, declined to answer questions about new complaints. The bureau’s public records show that Californians have filed 149 complaints against Money Network since 2022, when the company first started running a different state debit card program, with 101 complaints mentioning government cards.

Money Network said in a statement that “only a small percentage of EDD recipients have reported suspected fraud,” and that anyone concerned should “call the number listed on the back of their card.”

The EDD and Money Network also now allow direct deposit, giving people the option of skipping debit cards altogether. Since direct deposit launched in June, about 15% of new applicants have opted for debit cards, the EDD said in a statement. The agency could not immediately say how many of its hundreds of thousands of existing customers still use debit cards.

“Anyone who suspects they are a victim of fraud should take steps to protect themselves and file a fraud report,” the EDD said in a statement.

A flyer for identity theft resources and information sits on top of other documentation related to Kim Tanner’s financial fraud case on her desk at her home in Carlsbad on Oct. 11, 2024.

(

Photo by Adriana Heldiz

/

CalMatters

)

Lea Bitton was still reeling from a high-risk pregnancy when it happened to her.

One evening in June, the Orange County resident logged into her Money Network disability account and realized that $4,000 was missing. She relied on the EDD money to cover her family’s costs during parental leave.

Someone Bitton didn’t know had hacked into her account, according to a lawsuit she filed against Money Network. Similar to Tanner’s case in Carlsbad, a new electronic transfer was set up for someone with a different name and bank account, and Bitton was never asked to authorize the change before the money disappeared.

Matthew Loker, Bitton’s attorney, said the fraud appears similar to some EDD debit card fraud cases that he handled during the pandemic.

“It’s deja vu a little bit,” Loker said. “It’s a difficult problem, but it shouldn’t be the consumers who are left holding the bag.”

If fraud occurs once unemployment or disability money has already been transferred from the EDD to Money Network, the state’s contract says that Money Network is responsible for investigating and reimbursing clients if necessary. But some people with EDD Money Network debit cards say that it isn’t always easy to figure out how to start that process.

In Los Angeles, Greg Zekowski filed for unemployment while in between film projects. He hadn’t even used his EDD Money Network debit card yet, he said, when he logged into the online account and saw several unfamiliar charges to Uber and other retailers.

He called Money Network. “Their response was, ‘The problem is EDD,’” Zekowski said.

So he called the EDD: “Their response was, ‘It’s all them.’”

The EDD and its contractors aren’t alone. The state’s food assistance and college financial aid programs are also among the many financial systems facing mounting fraud risks.

One broader challenge is how few financial institutions bid on government benefit projects. The lack of options puts more pressure on agencies working to secure debit cards and other payments, according to a 2023 report by the Consumer Financial Protection Bureau.

“Providers may face minimal competitive pressure from program innovation, new entrants, or customer choice,” the report authors wrote, “which may exacerbate or cause the issues with fees and customer service that benefits recipients face.”

A financial cliff

While the EDD and the people who rely on it play whack-a-mole with fraud, California has big decisions to make about the future of the state’s job safety net.

If the state continues to do nothing, the LAO projected this week, it will have no unemployment reserves and become even more reliant on loans from the federal government to weather future recessions, likely costing taxpayers billions more in interest.

Or the state can bite the bullet, as many others have, and change the way it pays for unemployment.

First, the LAO recommends that businesses pay a flat 1.9% unemployment tax while digging out of debt. California companies also currently only pay unemployment taxes on the first $7,000 a worker earns each year. Instead, the LAO recommends taxing employers on workers’ first $46,800 in earnings — higher than some neighbors like Nevada, but lower than Washington, Idaho and Oregon.

“We understand that the scope of the recommendations that we’re putting forward in this report are significant,” said LAO analyst Ann Hollingshead. “This is just an honest reflection of the severity of the underlying problems in the system.”

State lawmakers last revamped unemployment taxes in 1984. And businesses are already voicing opposition to temporary tax hikes to pay down California’s deep federal debt. One bill to recalibrate how the system is paid for — raising unemployment taxes to eventually increase weekly benefits — died in committee this year.

Robert Moutrie, a policy advocate for the California Chamber of Commerce, said that the business group is still reviewing the details of the LAO proposal. In the past, the Chamber has favored tightening unemployment eligibility to reduce benefit payments, labeling any form of tax increases and proposals to expand the unemployment system “job killers.”

Daniela Urban, executive director of the Sacramento Center for Workers’ Rights, said there is broad agreement on how unstable the current situation is but discord on where to go from here. She and other labor advocates say that unemployment is one area where California businesses have long underpaid compared to other states, and that the system has not kept up with non-traditional jobs and increasing costs of living.

“We’re in a huge hole, and that’s not financially acceptable,” Urban said. “But how and when to make those changes I think is what the contention is.”

In addition to the funding hole, the pandemic revealed other problems at EDD. Tech systems buckled: jammed call centers, spotty online accounts and a patchwork behind-the-scenes process for tracking unemployment claims. The agency is currently overhauling these systems with EDDNext.

Last year, the agency hired Salesforce to remake the MyEDD online system that workers use to manage their accounts. It brought in Amazon Web Services to update and integrate EDD phone systems that left as many as 40 million calls a month unanswered during the pandemic.

Early next year, the state will award a contract for the biggest chunk of the project — a new central system for EDD personnel to manage claims, which comes with more than 600 pages of specifications.

“We are making tremendous investments in modernizing EDD and the work is going well,” the agency said in a statement.

The Los Angeles County Board of Supervisors voted Tuesday to move forward with a proposed ordinance that prohibits law enforcement officers from concealing their identities while interacting with the public in unincorporated areas of the county.

The proposal would require all officers and agents — local, state or federal — to refrain from wearing masks or other facial coverings. It also mandates that they display visible identification, including their agency name along with either their last name or badge number.

Supervisor Janice Hahn said the concealment of officers’ identities during these raids undermines public trust and creates unnecessary fear.

"We need to declare in no uncertain terms that in Los Angeles County, police do not hide their faces," said Hahn, who sponsored and co-authored the ordinance. "That is our expectation, and this ordinance will now make it a local law."

In a statement to LAist, federal immigration officials defended officers wearing masks. Department of Homeland Security Assistant Secretary Tricia McLaughlin said L.A. County's ordinance is unconstitutional.

“Our officers wear masks to protect themselves from being doxed and targeted by highly sophisticated gangs like Tren de Aragua and MS-13, “ McLaughlin said in the statement. “Criminal rings, murderers, and rapists who attempt to go after the officers and their families."

She also noted a provision of the U.S. Constitution that says federal law prevails over conflicting state law.

McLaughlin said L.A. County’s proposed ordinance would “violate the Constitution’s Supremacy Clause, which makes it clear that Los Angeles does not control federal law enforcement.”

The supervisors approved the first reading of the proposed ordinance in a 4-0 vote, with Supervisor Kathryn Barger abstaining.

They are expected to vote a second time on Dec. 9 to adopt the ordinance. If adopted, the new law would go into effect 30 days later.

Enforcement questions

According to county officials, violations would be punishable as infractions or misdemeanors. But it’s uncertain how L.A. County will enforce the new ordinance. It mirrors California’s first-in-the-nation state law passed in September.

The Trump administration has said its agents will not comply with California’s mask ban. And the Department of Justice sued California in November, challenging it.

Hahn said L.A. County will wait to see the outcome of that lawsuit before determining how to enforce the new ordinance.

“We’re going to wait until it plays out in court,” she said.

County officials said the ordinance was prompted by Immigration and Customs Enforcement sweeps that began in June.

Federal agents wearing plainclothes, tactical gear and masks conducted what county supervisors describe in the motion as “violent and indiscriminate operations in immigrant communities.”

“ These agents hide their faces and refuse to wear badges,” Hahn said. “They pull people into unmarked vans at gunpoint, and then they wonder why people resist arrest.”

“This is how authoritarian secret police behave, not legitimate law enforcement in a democracy,” she added.

Between June and August, the Department of Homeland Security arrested at least 5,000 people in Los Angeles County, including people who had not committed crimes, those with pending legal status and visa holders.

Exemptions

The Board of Supervisors originally approved a motion on July 29 directing County Counsel to draft the ordinance.

County officials said that when officers conceal their faces, it becomes difficult for residents to distinguish actual law enforcement from imposters, increasing the risk of criminal impersonation.

“It’s not public safety, it’s intimidation, plain and simple,” said Supervisor Lindsey Horvath. “Los Angeles County is not going to tolerate it. When the public cannot tell who a real officer is, everyone is at risk.”

Several immigrants’ rights activists showed up at the Board of Supervisors meeting on Tuesday to support the county’s move.

“It’s good that it's recognized that this is a problem, but the only way we're gonna actually do anything about it is to keep relying on the community to come out and support,” said Quetzal Ceja, an organizer for South Bay day laborers.

The ordinance includes several exemptions where law enforcement authorities can wear face coverings, including undercover and SWAT operations. They can also wear helmets and other equipment for health reasons or protection against environmental hazards.

If you have ever sworn off social media for a week or two because you sensed it was feeding your anxiety or dampening your mood, you may be on to something.

A new study out last week in JAMA Network Open found that cutting down on social media use even for a week can significantly reduce mental health symptoms in young adults.

It's part of a growing body of research that shows that taking breaks from scrolling and posting can be a mental health boon, especially for young people.

For example, a recently published meta-analysis found that limiting social media is tied to a statistically significant boost in "subjective well-being."

Unreliable data vs. an objective measure

Most studies on the impacts of social media ask users to recall how much time they spend on their phones or these platforms, as well as other aspects of their health like mood and sleep. But that data is often unreliable, says psychiatrist John Torous, director of the Division of Digital Psychiatry at Beth Israel Deaconess Medical Center in Boston and author of the new study.

"If you ask me, 'How much have you slept in the past week, and can you guess your screen time?" says Torous, "I don't think I would be right."

In the new study, Torus and his colleagues tried to get a more objective measure of social media use. They recruited 373 young adults ages 18 to 24. For the first two weeks, participants used social media like they normally would and allowed researchers to record information from their phones about their social media use, their step counts and their sleep. They had participants download an app that sent the data directly to the researchers.

2 weeks of observation, 1 week of detox

During the first two weeks of the study, the app gave Torous and his colleagues baseline data. At the end of those two weeks, the researchers shared that data with participants and gave them standardized questionnaires for symptoms of depression, anxiety, insomnia and loneliness. Then, they asked whether they wanted to try a weeklong social media detox.

"We had 80% of participants opt into the detox," says Dr. Elombe Calvert, a co-author of the study.

At baseline, the participants were spending about two hours a day on the five social media apps the study was looking at: Facebook, Instagram, Snapchat, TikTok and X (formerly Twitter). "During the detox, it fell to like 30 minutes a day," says Calvert.

By the end of that third week, Calvert and the team found a 16% reduction in anxiety symptoms, a 24% decrease in depression symptoms and a 14.5% decrease in insomnia symptoms. "So, it's very effective," says Calvert.

Torous notes that the results mirror what his and his colleagues' patients report. "We definitely have had patients telling us for some time that they've tried digital detoxes on their own [and] that they find it useful," he says.

Most participants in the study, however, did not score high enough in the mental health screenings to qualify for a mental health diagnosis, notes Torous. Only a minority showed elevated levels of symptoms at baseline, and this group showed "greater improvement," he says.

Striking results

"It usually takes eight to 12 weeks of intensive psychotherapy to see those kinds of reductions in mental health symptoms," says psychologist Mitch Prinstein, chief of strategy and integration at the American Psychological Association. "So if you can get those with just one week of change in behavior, wow!"

What's also striking, adds Prinstein, is that as the participants cut back on social media use, their screen time didn't go down. They were doing other things on their devices.

"So, it really helps us see that it's not just your screen that's a problem," he says. "It might be social media in particular."

Ready to get some relief yourself? Here are a few tips from experts:

1. Block out time

Using social media mindfully can help, says Prinstein. That can take the form of setting goals for when we check our phones and for what. For example, setting aside 10-minute blocks at specific times to get rid of notifications or check headlines or unread messages. "Doing so seems to work and keeps us from getting distracted or going down rabbit holes for hours," he says. 

2. Make it harder to log on and scroll

Removing apps from the home screen and disabling notifications from social media apps can help too, says psychiatrist Amir Afkhami, at the Department of Psychiatry and Behavioral Health at the George Washington University School of Medicine and Health Sciences. So does "logging out of the platform after use, which makes it a little bit harder to get back in," he says.

3. Protect sleep

For many people, social media use affects mood through "nighttime scrolling" by disrupting sleep and contributing to insomnia, says Afkhami. For those individuals, restricting evening or nighttime use is key, he adds. In a study published this year, Torous and his co-authors recommend "at least one hour of tech-free time before bed, to mentally disconnect from the online world and promote adequate, restful sleep." Parents can help teenagers build a habit of not using social media at night by designating bedrooms as "tech-free zones" at night, according to Torous and his colleagues. 

4. Stroll more, scroll less

For those who turn to social media during periods of boredom, Afkhami recommends replacing screen time with physical activity like a walk or a run. "The initial hump is a little bit higher," he says, "but over time, actually, patients end up liking it more because they get more of a dopamine surge than they do with social media." 

5. Seek treatment, if more is going on

For many people, social media overuse is linked to underlying mental health conditions such as depression, anxiety and ADHD, adds Afkhami. And while cutting back on social media might help alleviate some of those symptoms, he recommends that they also seek treatment from a mental health care provider.
Copyright 2025 NPR

Air travelers in the U.S. without a REAL ID will be charged a $45 fee beginning in February, the Transportation Security Administration announced Monday.

The updated ID has been required since May, but passengers without it have so far been allowed to clear security with additional screening and a warning. The Department of Homeland Security says 94% of passengers are already compliant and that the new fee is intended to encourage travelers to obtain the ID.

REAL ID is a federally compliant state-issued license or identification card that meets enhanced requirements mandated in the aftermath of the Sept. 11, 2001, terrorist attacks.

Obtaining the ID — indicated by a white star in a yellow circle in most states — means taking more documents to the motor vehicle agency than most states require for regular IDs. It was supposed to be rolled out in 2008 but the implementation had been repeatedly delayed.

Beginning Feb. 1, travelers 18 and older flying domestically without a REAL ID and who don't have another accepted form of ID on them, such as a passport, will pay the non-refundable fee to verify their identity through TSA's alternative "Confirm.ID" system.

TSA officials said that paying the fee does not guarantee verification, and travelers whose identities cannot be verified may be turned away. If approved, however, the verification covers a 10-day travel period.

The fee can be paid online before arriving at the airport. Travelers can also pay online at the airport before entering the security line, but officials said the process may take up to 30 minutes.

The TSA initially proposed an $18 charge for passengers without a REAL ID, but officials said Monday they raised it after realizing the alternative identification program would cost more than anticipated.

Other acceptable forms of ID include military IDs, permanent resident cards and photo IDs from federally recognized tribal nations. TSA also accepts digital IDs through platforms such as Apple Wallet, Google Wallet and Samsung Wallet at more than 250 airports in the U.S.
Copyright 2025 NPR