Fraudulent claims for unemployment benefits are up
Employers in state flagging fraudsters
Companies in Connecticut have been flagging fraudsters who appear to be filing claims for unemployment benefits by posing as their employees using stolen information.
The latest scam has been ongoing in recent weeks, in which people attempt to file for unemployment benefits and pocket the money by submitting claims through the victim’s employer. The Department of Labor said it has received a number of isolated reports, but said its system has not been the root of the cause.
Instead, a department spokeswoman attributed the recent problem to standard identity theft through social media, phishing, information purchased on the “dark web,” or other means.
“ReEmployCT is doing exactly what it is supposed to do — it alerts employers in real time so they can see who’s filing against them,” said DOL spokesperson Juliet Manalan said of the state’s new unemployment filing system. “ReEmployCT does it faster, it’s automated and doesn’t require [DOL] staff the way the old system did. It’s a canary in a coal mine — if the employers can see what the agency sees, we can stop more fraud faster and prevent non-fraud overpayments.”
Weeks after the issue first came to light, businesses and workers continue to report instances of identity theft. A Massachusetts firm which vets unemployment claims on behalf of employers reported that, of filings it received through the ReEmployCT system over multiple days in late July, more than half were fraudulent, according to Connecticut Business and Industry Association.
Since then, nearly two-dozen Connecticut employers or individual workers have posted to the CBIA website of having
similar experiences, with a few saying perpetrators had gotten hold of their Social Security numbers and questioning how that could have occurred.
“I was actually the latest ‘victim’ in our practice — that makes seven of us so far,” said Diane Paskiewicz, practice administrator for Consulting Ophthalmologists in Glastonbury, in an email response to a CT-Insider query. “I have to say I was very pleased with the responsiveness of the department, and my understanding now is that it is not the Re-Employ system that is the cause of these fraudulent claims but rather these claims are now being found and investigated as soon as someone applies.”
ReEmployCT debuted in July as the replacement for a decades-old predecessor system that was unable to handle the deluge of claims that hit in the first months of the COVID-19 pandemic, as employers triggered mass furloughs and solo workers were allowed for the first time to apply for benefits. The switch to ReEmployCT was pushed back a year as DOL assigned available staff to handling the unemployment crisis.
This week, the Connecticut Department of Labor warned of a scam in which fraudsters have been sending texts to people, with messages made to appear as if they were generated by ReEmployCT and asking them to verify personal information.
On its @CTDOL Twitter account on Wednesday, DOL issued a fresh warning for people to avoid clicking on links or responding to social media messages that might appear to be from DOL staff, saying the department does not use those channels in administering claims.
DOL has an ID theft report form online at portal.ct.gov/dolui/ fraud-alert. People can call 1-800-956-3294 weekdays as well for live assistance.
Under federal law, each of the three major credit reporting agencies Equifax, Experian and Trans-Union are required to furnish a free credit report annually to anyone who asks for it, with information online at www.consumerfinance.gov. The companies are allowed to charge up to $13.50 for any subsequent credit reports after supplying the freebie.
As of the second week of August, about 29,800 people in Connecticut were receiving federal unemployment benefits according to a Thursday update by the U.S. Department of Labor, with DOL receiving more than 8,100 initial claims the following week that are being processed for eligibility.
Unemployment fraud was already a national problem — according to the Office of Inspector General overseeing the U.S. Department of Labor, authorities have recovered just $4 billion of a suspected $163 billion siphoned off by criminals during the pandemic.
DOL and the Connecticut Chief State’s Attorney have announced one prosecution to date this year, involving a trio of people accused of stealing $80,000.
Republicans in Congress have proposed legislation that would steer billions of dollars in funding to states to equip them better to chase down fraudsters. Through this past March, the federal government had provided $134 million in support to state departments of labor, according to OIG.
The U.S. Employment and Training Administration estimates the Connecticut Department of Labor paid out nearly $493 million in “improper payments” over three years through July 2021, or 15.8 percent of all assistance disbursed by DOL. The vast majority of that amount related to beneficiaries violating varying requirements, however, such as proving they are searching for work every week while receiving payments.
Connecticut’s 15.8 percent rate was middle of the pack nationally, but better than every Northeast state save for Maine and New Jersey. The department believes it has thwarted $3 billion in fraudulent claims attempts in the past two years.
Maine, Rhode Island and Connecticut are three of the states that fund the larger ReEmployUSA consortium, alongside Mississippi and Oklahoma. Tata Consultancy Services developed the system and provides ongoing technical services maintaining it, with Amazon Web Services hosting ReEmployCT on its cloudbased platform that includes state-of-the-art security.