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Unemployment Compensation (UC) Fraudulent Claims Update & Guidance

Many employers are reporting receiving Unemployment Compensation (UC) claim notices and other documents about claims that they believe to be fraudulent. Many RCPA members are reporting that an employee still works there and did not file a claim, or that the alleged claimant never worked there. It is important that employers respond to these notices promptly.

Initially, some believed that it was a case that the new system was compromised, but we have learned that this was not the case. Identifying data was stolen in various data breeches we hear about on the news and then sold to criminals (often organized), who use it to file fraudulent unemployment claims.

The new system was presumably targeted simply because it is new, and the criminals want to see if they can get away with the fraud, although we were hearing about increased levels of fraudulent claims in regular UC before the launch. The department tells us that the new system has the regular fraud prevention measures that were present in the old system (so most of these are not being paid), but they are also going to implement identity verification (through ID.me, which they used in the PUA program). No date has been announced on that yet.

Last year, massive numbers of fraudulent claims were filed in the Pandemic Unemployment Assistance (PUA) program in Pennsylvania and across the nation. International and domestic criminals (often organized criminal groups) obtained personal information that was stolen through a data breach (from another source — the data was NOT stolen from L&I). These criminals then used this personal information to file fraudulent unemployment claims.

In addition to attempts at defrauding PUA, there has been an uptick in fraud against regular UC. Although this was happening prior to the rollout of the new system, these attempts seem to have accelerated somewhat under the new system. At a June 23 hearing of the Labor and Industry Committee, the Department of Labor and Industry testified that, while the traditional fraud crosschecks were incorporated in the new system, the identity verification procedures incorporated in PUA have not yet been introduced for UC. They did not provide a specific date, but they hope to implement ID.me verification for UC soon.

We have been offered guidance from the legislative panel who heard the aforementioned testimony from the Department of Labor and Industry. What should you do if an employer contacts your office to report possible Unemployment Compensation (UC) Fraud?

  1. Respond promptly to any employer notices about a fraudulent claim, clearly stating the situation (current employee did not file a claim, claimant never worked there, etc.) and that the employer believes the claim to be fraudulent. There are directions in the notice about how to respond. Although this can be done by mail, the fastest way to do this is in the employer’s portal in the new UC system. One of the major reasons for the implementation of the new system is improved business processes, and consequently employers can manage all their UC dealings through the new system. For those employers who need to learn the system, there are resources online that may be helpful:
  1. If a current employee seems to be the victim of identity theft, the employer or employee should fill out an online fraud report through UC’s website. There are several types of fraud, so they should take care to report identity theft fraud, and they should include as much information as possible. The link to UC’s fraud information page is here.
  2. Finally, since the employee is likely the victim of identity theft, the employer may want to share some additional information and identity theft resources with the employee. If the legislator’s office does not stock caucus identity theft publications, the FTC’s identity theft website contains information about what steps the victim should take to recover and protect their identity.

RCPA continues to monitor these activities through our government affairs director and the RCPA Human Resources Committee. Please contact your RCPA Policy Director if you have any further questions.

Source: on 2021-07-07 10:48:45

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