Unemployment Insurance Fraud

Identity Fraud Scenario

Money Meant for the Jobless. Unemployment benefits are not always going to the people who need it
the most.

unemployment-promoUnemployment insurance fraud occurs when individuals knowingly collect benefits based on false information — such as a stolen name or Social Security number — filed on the claim. Unemployment insurance fraud threatens the availability of funds for people with legitimate claims, straining the state’s trust fund and increasing unemployment taxes for businesses.

 

  • “Nearly 3,200 households making more than $1 million per year received unemployment benefits during the economic downturn, according to Bloomberg, amounting to $80 million paid out by
    the government.” 
    -Huffington Post

  • “As much as 30 % of the wrong payments in 2010 went to people who had returned to the workforce but continued to claim benefits, according to Dale Ziegler, deputy administrator for the Office of Unemployment Insurance at the U.S. Department of Labor.” (Those payments came even after a 2009 executive order by President Obama seeking new policies to cut payment errors, waste, fraud and abuse.)
    -Fox News

  • Last year, the government overpaid $10.8 billion in unemployment insurance alone tied to fraud, waste and abuse. On average about 50% of overpayments are collectable, but with so much money to collect and so few resources as it is, states need to focus on the 50% that they can actually recover.

A new report finds that the U.S. government paid out billions in unemployment benefits to people who were actually working, sparking concerns that unemployment insurance fraud cost the federal government $6.2 billion in 2013. It is not just lowly criminals who perpetrate this fraud. Nearly 3,200 households making more than $1 million per year received unemployment benefits during the economic downturn, according to Bloomberg, amounting to $80 million paid out by the government. Other ineligible groups notoriously receiving jobless benefits include prisoners and the deceased.

A more recent fraud scheme involves the creation of a real business, complete with Secretary of State Filings, and payments of unemployment taxes on individuals whose identities have been stolen. After a few months of payments, the business closes and the fraudsters use each of the stolen identities to file unemployment insurance claims. This type of fraud is extremely difficult to detect, as the business and identities pass current cross-matching solutions.

Request an Identity Solutions Demonstration

We have analyzed hundreds of millions of identities across dozens of federal, state and local systems for identity risk, and are the global leader
in mitigating identity risks. Learn how others have done it through an identity solutions demonstration today.

Get Your Demonstration!