Scam unemployment claims continue to cost Rhode Island, with more than $70.5 million in fraudulent payouts racked up since the start of the COVID-19 pandemic, according to the R.I. Department of Labor and Training.
That amount is up from $38 million in March 2021, although labor officials say they have taken steps to deter fraudsters, including installing a new unemployment insurance online platform that’s being rolled out this year.
The confirmed fraudulent payouts were issued by Rhode Island as part of $3.7 billion in unemployment insurance checks that the state has doled out since the start of the pandemic in March 2020.
The magnitude of the unemployment insurance scam in the country’s smallest state is part of the reason why Rhode Island was recently ranked No. 1 for fraud per capita for the first half of 2021, according to a recent report by international fraud monitoring and prevention company SEON. Rhode Island saw 1,017 fraud reports per 100,000 people during that time, which puts it far above second-ranking Alaska, which saw 608 cases per 100,000 people.
Sen. Louis DiPalma, D-Middletown, says he was targeted as a chief engineer working for federal defense contractor Raytheon Co. DiPalma’s employer received notice about an unemployment claim made in his name, listing his former address, with a more than $500 direct deposit payment sent to a still-unknown perpetrator.
DiPalma, who has been hosting an annual “Cyber Hygiene Event” for five years to help raise awareness about identity protection, said the state works hard to combat unemployment fraud attempts but more needs to be done to verify information. DiPalma also said part of the problem is internet-based banking that allows criminals to open accounts in other people’s names without in-person verification.
“Something needs to be done to correct this, obviously,” DiPalma said. “We need a better technique to get people the benefits they need and deserve, with minimal fraudulent claims associated with it.”
DiPalma suspects his personal information was stolen and sold on the “dark web” as a result of a 2015 data breach that impacted the U.S. Office of Personnel Management.
“One of the challenges here is once your Social Security number and other information is out there, for criminals, it’s the gift that keeps on giving,” he said. “It doesn’t go away.”
Matthew Weldon, DLT director, says his department is working constantly to address these problems, currently through its new UI Online platform that uses “front-end, anti-fraud measures” designed to thwart fraudulent unemployment claims.
“We are currently testing out this new system with several hundred claimants and anticipate a full launch early this year,” Weldon said in an email message. “Rhode Island, like all states, has been a target of unemployment insurance imposter fraud during the pandemic. … The department scrutinizes every unemployment claim that comes in and stops a number of them each week for additional levels of identity verification.”
Anyone who believes they’ve been targeted can go online to www.dlt.ri.gov/fraud to report unemployment fraud, Weldon said.
Attorney General Peter F. Neronha said the infusion of COVID-19 relief aid has provided plenty of opportunity for scams. His office’s consumer protection unit is fielding complaints from more than 700 state residents a month. A criminal investigation into unemployment fraud recently led to the arrest of six people, he noted. “When individuals collect benefits that they aren’t entitled to, they reduce the amount of benefits that are available to Rhode Islanders who really need them,” Neronha said.
Marc Larocque is a PBN staff writer. Contact him at Larocque@PBN.com.
