Labor agency flagged far more benefits claims as suspicious
Fraud in unemployment benefits soared in 2020 as the government rushed to send hundreds of billions of dollars in COVID-19 relief to struggling families.
The Labor Department’s inspector general estimates that at least $63 billion in unemployment benefits were stolen last year.
In Texas, about 276,000 claims were flagged for suspicious activity in 2020, compared with just 1,210 in 2019, according to the Texas Workforce Commission. This means these claims are being investigated but have not been determined to be fraudulent. Once a claim is flagged as suspicious, the account is put on hold, so most of these are caught before the money is sent out, commission spokesman James Bernsen said.
“It’s yin and yang,” Bernsen said. “You want to get payments out quickly, but that works against fraud prevention because that will slow it down.”
No payments went out for about 75 percent of the suspicious claims. The other 25 percent did have money deposited into their accounts, but legitimate beneficiaries could have been flagged for fraud, Bernsen said.
Most of the fraud is related to identity theft, the commission said. Many victims are unaware that people have filed claims or collected benefits in their names illegally. Many find out only when they receive unexpected mail, such as a state-issued 1099-G tax form for benefits they didn’t get.
Last week, the Labor Department launched a website to help people report stolen benefits if they are victims.
The website, www.dol.gov/ fraud, provides tips to help victims address issues that might arise because of previous identity theft, such as how to file taxes correctly if someone is a victim of theft, or what documentation they may need to file a claim with
their state workforce agency.
“We understand that victims of unemployment insurance fraud are scared, confused and deeply frustrated,” Principal Deputy Assistant Secretary for Employment and Training Suzi Levine said in a statement. “The U.S. Department of Labor is committed to working with state workforce agencies and our federal and state partners across government to ensure these victims have access to the resources they need.”
Those who believe they’re victims of fraud also can call the Texas Workforce Commission Fraud and Program Abuse Hotline at 800-252-3642. The hotline is available 24 hours a day, seven days a week and permits anonymous reporting.