PROVIDENCE – Pandemic restrictions may be ending, but fraudsters masquerading as unemployed Rhode Islanders seeking government benefits are alive and well.
The R.I. Department of Labor and Training continues to see a steady wave of fraudulent unemployment claims – about 6,200 confirmed fake claims were found this month alone, out of more than 75,000 identified since March 2020, according to data provided to Providence Business News. Not only does that mean the state is still paying for fake claims, but Rhode Island residents are still having their identities and personal information put at risk through these schemes.
Diversity matters at Amgen
We believe our differences lead to better science and better business outcomes, enabling us to…
Learn More
Lt. Matthew Salisbury, who heads the financial crimes unit for Rhode Island State Police, estimates at least 96,000 residents have had fraudulent unemployment claims filed in their names since the pandemic hit last spring.
“And that’s a conservative number,” Salisbury said, since his estimate was only based on people who reported false claims to his department.
Investigations into unemployment fraud claims have come fast and furious since COVID-19 hit, overwhelming his department with 1,000 new reports a day – though that number has dropped down to about 400 daily, Salisbury said.
It’s worth noting that daily or monthly numbers reflect when fake claims were detected and reported, not when the actual fraud happened. For example, the state reported the highest monthly unemployment fraud claims in February – more than 17,000 – which coincided with when most people received their 2020 employment income records for tax purposes, alerting many who were previously unaware of false claims filed on their behalf.
And the increase has, in turn, forced law enforcement and state administrators to beef up the systems through which they review, catch and investigate these claims.
Matthew Weldon, DLT director, pointed to a number of technological updates his agency has implemented to catch fraudsters, such as a multifactor authentication system that asks applicants to confirm their identity through a separate form of communication and machine learning tools that use algorithms to detect possible fraud in applications.
Weldon declined to name specific examples of application details that may alert the algorithms for security purposes.
Weldon said his agency will continue to hone and improve its process, especially as fraudsters get smarter and figure out workarounds to existing safeguards, Weldon said.
“They figure out the rhythm to it pretty quickly,” he said.
Meanwhile, Rhode Island State Police have taken over what was originally a municipal law enforcement responsibility, creating an online form for residents to report suspected fraud online and, when cases cross state lines, teaming up with the FBI to go after fraudsters.
That doesn’t protect victims’ personal information, which may have been compromised by a fake claim. For that, R.I. State Police are referring victims to the Federal Trade Commission.
Salisbury also suggested victims buy private software for identity protection. Then there’s the tedious task of canceling credit cards, changing bank personal identification numbers and swapping out passwords.
Longer and stronger passwords that are changed multiple times per year are “one of the biggest keys to protecting yourself,” Salisbury said.
To get back some of the money, both agencies are also working with local banks that may have processed fake unemployment claim payouts. As of May, the state has reclaimed $3.5 million that was paid out in fraudulent claims – about 7.5% of the $47.1 million that went to fake unemployment claims in the last 15 months.
Federal funding for unemployment claims has covered about three-quarters of benefits paid, including those from fraudsters, meaning the state unemployment insurance trust fund remains solvent; it stood at $158.2 million as of May, according to DLT. Weldon was also confident the fund would be able to support continued payouts – both real and fraudulent – and avoid borrowing from the federal government, something which 20 states and Washington, D.C., had already been forced to do by the end of 2020, according to The Tax Foundation.
