Fraudulent jobless claims slow relief to those needing it most
When Alexandria Preston had to leave her job as a medical assistant to care for her two children during the coronavirus pandemic, she didn’t encounter endless delays like so many others trying to get unemployment benefits.
But three weeks later, the payments stopped coming. Then her account was canceled entirely — forcing her to dip into the savings set aside for dental work for her 12-year-old daughter, who has cystic fibrosis.
Preston’s claim had been flagged with the date 9/9/ 9999 — an indication it was being reviewed for identity fraud, a vexing problem for an already strained unemployment system that has delayed payments to hundreds of thousands of jobless people.
“It was two weeks of not knowing anything and not getting any answers,” said Preston, who lives in Bangor, Maine.
More than 40 million workers have filed for unemployment benefits since the early days of the pandemic — more than seven times the number of requests in all of 2019. And all of those claims have been convenient cover for identity thieves filing bogus applications that could cost billions of dollars.
“Fraudsters have been able to hide in the flood of data,” said Pam Dixon, executive director of the World Privacy Forum, a public interest research group. “It is a perfect storm of identity fraud. Anyone who has experienced a major breach in the past three or four years could fall victim to this.”
The coronavirus has made the unemployment system, which is administered by the states, an attractive target in other ways, too: The coronavirus relief package added an extra $600 a week to successful claims and expanded eligibility to selfemployed and similar workers, who are not subject to the same employment verifications that typically apply.
Having your application flagged for review doesn’t necessarily mean someone else tried to pose as you; it just means your state thought it warranted further inspection. Fraudulent claims have forced states to dial up their scrutiny and deploy systems that mark potentially suspicious claims. And those reviews take time.
Preston, 29, said she had been told that a review of her account would delay payments for at most 72 hours, but that wasn’t even close. “I had called hundreds of times every day for the following week and still didn’t get anything,” said Preston, whose daughter has to be completely isolated during the pandemic.
The Maine Labor Department said in a Facebook post that claimants should email their identification — an idea that made Preston nervous because officials have warned against exactly that in the past. She did it anyway.
A little less than a week later, her payments resumed.
“It was very stressful going without any payment for three weeks and not having any idea when it would be fixed,” she said.
Officials in Maine said they do not comment on specific cases but added that everyone whose claim was being flagged would now receive instructions on how to verify their identity through a mailed letter.
Improper payments nationwide could cost up to $26 billion this year, largely because of fraud, according to congressional testimony from Scott Dahl, who just retired as inspector general at the Department of Labor. The department is investigating more than 400 matters related to unemployment insurance, and it expects that number to continue to rise.
Some applicants have been unable to collect benefits because identity theft problems from years past continue to haunt them.
“They can’t complete an application,” said Laurie Yadoff, director of an economic advocacy project at Coast to Coast Legal Aid of South Florida, who has worked with several clients with lingering problems.
”And they are not receiving any money even though they are entitled to it, even though they are on the verge of eviction,” she said.