Thieves may divert benefits, state warns

Identity fraud scam initially targeted pandemic assistance

HARRISBURG — As if Pennsylvanians receiving unemployment compensation haven’t had enough headaches trying to file claims and deal with bureaucracy, now the state identified a new problem that could affect them.

Pennsylvania officials say identity thieves may be able to steal unemployment compensation benefits by diverting the deposits away from recipients’ bank accounts into their own.

Unemployment Benefits Policy Director Susan Dickinson said during an online town hall Thursday that the Pennsylvania Treasury Department is working to identify and halt cases of the fraud.

Officials said in May that only the federal Pandemic Unemployment Assistance program for self-employed and freelance workers was susceptible to identity fraud. The

scheme resulted in thousands of Pennsylvanians getting checks and debit cards they never applied for after the state halted direct deposits.

The town hall, where Department of Labor & Industry officials fielded questions from people navigating the stressed unemployment system, ended with a question from a woman who said she started receiving unemployment benefits in April but that they stopped in mid-June even though she continued to file claims.

Like many people with questions about unemployment, the woman said she was unable to get through on the phone. With an unprecedented 2.2 million applications since March, the agency has been overwhelmed with calls and emails, officials say.

“I don’t even know what’s going on,” the woman said. “This is my last resort. I tried to call over 100 times.”

Dickinson told the woman her situation sounded as if it could be a case of fraud. She instructed the woman to check and see whether any payments had been made since the last one she received.

“If you’ve been filing weeks and your benefit inquiry shows payments have been made, that means someone may have stolen your identity and hijacked your payments,” Dickinson said, adding that if no payments had been made it may be a problem with her claims.

Labor & Industry officials said in May that Pennsylvania’s unemployment system was affected by a nationwide scam using personal identification information stolen in a data breach elsewhere. The scammers targeted the Pandemic Unemployment Assistance program, taking advantage of the fact that it did not require a personal identification number to be mailed to the recipient’s physical address.

Officials discovered that when scammers tried to apply for Pandemic Unemployment Assistance using the Social Security number of a person already receiving standard unemployment compensation, the account information for direct deposits would be changed, Dickinson said.

Dickinson did not take follow-up questions, and the Labor & Industry press office said the department could not release additional details because of an ongoing investigation with state and federal law enforcement.

Also Thursday, Dickinson said the start of a new quarter this month may result in changes for those receiving Pandemic Unemployment Assistance or federal and state extended benefits for those who had exhausted their regular unemployment benefits.

Eligibility for unemployment compensation is based on an applicant’s earnings in the first four of the five most recent quarters. At the end of June, the period considered changed to April 2019 to March 2020. The state is required to determine whether people receiving emergency or extended benefits now qualify for regular unemployment benefits. Those who were previously ineligible because of insufficient earnings may now be eligible and will receive a notification from the state.

Dickinson also noted that the $600a-week federal supplement to unemployment benefits expires July 25, but claims for weeks of unemployment between April 4 and July 25 will still be paid after that date.

Since unemployment applications surged in mid-March, Pennsylvania has paid $24.5 billion in unemployment claims.