How Unemployment Insurance Fraud Exploded During the Pandemic
July 26, 2021
By Cezary Podkul, ProPublica
Unemployment insurance fraud exploded in the pandemic, causing what may turn out to be the biggest fraud wave in U.S. history. From using bots to writing how-to guides on how to claim fraudulent payments online, fraudsters have developed ways to file bogus claims for unemployment insurance benefits in multiple states during the COVID-19 pandemic. 27 states have tapped identity verification company ID.me to help combat unemployment fraud by verifying claimants are who they say they are by having them upload identity documents, selfies, and appear on a video-chat session with a Trusted Referee to confirm the claimant’s identity.
“ID.me’s chief executive, Blake Hall, made headlines last month when he told Axios that he thinks taxpayers’ losses from UI fraud will top $400 billion.
Hall based the figure on the precipitous drop-offs in new claim applications that states have experienced after implementing ID.me verification. In New York, for instance, state data confirms that new claims for PUA fell by 89% after ID.me went live in late March.
Fraudsters are trying to adapt. Telegram forums have lit up with offers of sauces and software that sellers claim can bypass ID.me. Hall said his firm monitors such ads and maintained that he has yet to find any that work. “There is no bypass,” he asserted.”