CRANSTON – The R.I. Department of Labor and Training has stopped an estimated $3.2 billion in unemployment benefits from being paid out to fraudsters over the course of the COVID-19 pandemic through detection efforts, the department said Friday.
DLT has stopped a total of 426,643 suspected fraudulent unemployment claims from March 9, 2020 to March 1, 2021. Of these, 56,365 have been confirmed to be fraudulent. Another 326,319 likely fraudulent claims remain stopped and under investigation, and 43,959 suspected fraudulent claims have since been confirmed to be legitimate and unfrozen, the department said.
To date, the state has paid $37.6 million to confirmed fraudulent claims out of the $2.8 billion in total unemployment benefits paid by the department since the beginning of the pandemic. DLT said it has also paid $209.6 million in suspected fraudulent claims.
Of the total amount paid in suspected and confirmed fraud, less than 25% came from the state trust fund, and over 75% came from federal funding sources. The DLT said that $3.5 million in fraudulent payments have been recovered to date, and efforts to recover additional funds are still ongoing.
“It’s upsetting to me how fraudsters have taken advantage of these financial lifelines and victimized thousands of Rhode Islanders,” Matthew Weldon, DLT’s acting director told the Providence Business News. “The other victim here is employers, who pay into the UI trust fund. Less than 25% of fraudulent payments came from the state trust fund, but any loss to fraudsters is still unacceptable.”
DLT said it has worked to address fraud with cybersecurity experts, state and federal law enforcement agencies, the U.S. Department of Labor, and counterparts in other states to develop and refine anti-fraud techniques. Unemployment insurance claims are screened for a number of indicators that identify fraudulent claims.
“We have learned a lot over the past year and are refining our fraud prevention and detection efforts on a weekly basis,” said Weldon, noting that implementation of detection technology plays a role in DLT’s efforts. “We will continue to do everything we can to combat this. And we are thankful that we have the technology needed to be able to pull these fraud numbers and analyze the data.”
Weldon said that across the country, fraudsters have been taking advantage of the financial lifelines provided through state unemployment insurance programs. “Rhode Island has not been spared,” he said. “We take the issue of unemployment fraud very seriously and are committed to doing everything we can to combat it.”
“We have taken great care to ensure that our anti-fraud efforts pose minimal hindrance to legitimate claimants who are reliant on unemployment benefits to provide for themselves and their families during this economic crisis,” Weldon said.
UI fraud is a nationwide issue that all states, including Rhode Island, have been combatting since the pandemic began. Fraudsters use information that was previously stolen from outside sources to illegally file for unemployment benefits under someone else’s identity. DLT has been working closely with the R.I. State Police and federal law enforcement to share information on fraudulent claims to support their criminal investigations.
The DLT said that if a claimant believes they are a victim of fraud, they should file a report with the R.I. State Police on their website. The department also recommended filing an identity theft report with the Federal Trade Commission and monitoring credit reports. Full guidance from the DLT is available here.
If a legitimate claimant has their claim inadvertently stopped for fraud, they will receive an email with instructions on how to unfreeze their claim, the department said. The email will direct the claimant to an online platform to verify their identity. If they are unable to use that platform, there is a direct phone number they will be able to call, as well.
Cassius Shuman is a PBN staff writer. Email him at Shuman@PBN.com.
(ADDS 11th and 12th paragraph on DLT guidance for impacted claimants.)
