The state of Michigan’s unemployment insurance agency says it has beefed up efforts against fraudulent unemployment claims following an influx of identity theft complaints late last year and early this year related to big nationwide data breaches.
The agency received 1,600-2,000 calls to its fraud hotline each week in January, said Wanda Stokes, director of the Talent Investment Agency, which runs the Unemployment Insurance Agency. That number decreased to 300 per week last month.
“What we found was that many of these unemployment insurance claims were fraudulent and, for the most part, we were stopping them,” Stokes said at a news conference Monday morning. “We revamped some systems. Now we are able to investigate these claims quickly and thoroughly and make sure they are not paid out.”
To help combat the issue, new legislation to help strengthen Michigan’s identity theft protections went in effect late last month. In addition, the agency introduced prevention tactics including allowing employers and individuals to make reports online, requiring more materials from questionable applications, restructuring its investigations division and revamping its fraud hotline.
The agency is still trying to determine how many of the claims made were false and how much money the state has paid out to fraudulent claims, said Michelle Beebe, senior deputy director of the Talent Investment Agency.
The claims are processed with the software MiDAS, a glitch in which was responsible for a data breach early last year and, between 2013 and 2015, wrongly flagged 20,000 people for fraud. The $47 million automated system, designed by Colorado-based vendor Fast Enterprises, is now being overseen by agency employees alongside eight investigators, Stokes said.
She said the agency’s fraud hotline has also been improved and that callers will not experience the past issues of not being able to reach a human or dealing with a long delay.
The unemployment agency is working with the state police, secretary of state and treasury department to combat unemployment insurance fraud and identity theft, Stokes said.
She said she was unsure how many people have been prosecuted in Michigan for related crimes.
“Identity theft and fraud are low risk/high reward crimes,” said Detective James Grady, who works with the fraud investigations section of the Michigan State Police. He said cyberhackers and identity theft criminals operate from all over the world and are constantly hatching new plans to rip off personal information.