Pa. cracking down on unemployment comp fraud with new ID verification measures

Pennsylvania is taking measures to rein in skyrocketing cyber fraud that’s attacking the state’s unemployment compensation system.

The Department of Labor and Industry announced Friday that it had contracted with identity verification service ID.me to screen new applicants for benefits.

“We take unemployment benefit fraud very seriously at L&I, and we are committed to working with our partners to prevent fraudulent claims and hold those responsible accountable for their actions,” said Labor and Industry Secretary Jennifer Berrier.

Earlier this week, WHYY News reported that fraud attempts had spiked since the commonwealth switched its benefits administration system from a decades-old mainframe-based system to a modern online portal.

Cyber criminals have been targeting public benefits across the country throughout the pandemic, harvesting personal information that has been leaked through various data breaches to file new claims on behalf of real people.

Though the state has not provided information about how many fraudulent claims poured in since the changeover, the number of new claimants rose from 31,000 a week in May to more than 71,000 this month, even as unemployment has trended steadily down.

The majority of fraudulent UC claims are stopped before payment occurs through antifraud tactics other than ID.me, said spokesperson Sarah DeSantis in a statement.

Interstate Tax Inc., a unemployment compensation consulting firm, praised the new security measures.

“For our firm, the implementation of ID Me is an instant success,” said president Geoff Moomaw. Interstate works with hundreds of employers and estimated that about 75% of the new unemployment claims its clients reported were fraudulent.

“The number of messages we received from the new benefit system went from over 1,000 per night to almost nothing” once the new identity verification measure was put in place, Moomaw said.

Advocates for unemployment recipients say the measure could make the program less accessible for people who actually need the cash, especially those with language access or technology issues.

ID.me has been in use for another benefits program, Pandemic Unemployment Assistance, since September 2020, after that system was hit with fraud. Berrier said the service had helped keep millions of dollars from going to fraudsters who have been attacking PUA.

WHYY is one of over 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push towards economic justice. Follow us at @BrokeInPhilly.