September 26, 2020

Unemployment Benefits Program Has Issues With Fraud and Math

“We do suspect that a big part of the unusual recent rise in P.U.A. claims is linked to fraud,” said Loree Levy, a spokeswoman for the California Employment Development Department. She said the state was investigating “unscrupulous attacks” exploiting identity theft and vulnerabilities in the system.

Pandemic Unemployment Assistance is meant to provide benefits to the self-employed, independent contractors, gig workers, part-timers and others ordinarily ineligible for state unemployment insurance. Set up to last through the end of the year, it was a major element of the CARES Act, which economists widely agree has kept the country from a far greater economic calamity. According to the Labor Department, $47 billion in pandemic unemployment benefits have been paid so far.

Fraud is not uncommon in hastily assembled disaster programs, including the Paycheck Protection Program, the component of the CARES Act that provided forgivable loans to small businesses to help weather the pandemic without layoffs.

But signs of trouble with the Pandemic Unemployment Assistance program have surfaced for months as people who did not file claims — including the governor of Arkansas — found benefits issued in their names. A growing number of states have signaled that the problems with the program go beyond the routine.

California has warned that it is cutting off recipients when it detects irregularities, like mailings stacking up at a given address. “These situations are believed to be fraud, and scammers will often try to intercept, redirect, or gather mail associated with these claims,” the state’s employment agency wrote.

Colorado said Thursday that in a six-week stretch this summer, 77 percent of new claims under the program were not legitimate.

“Nationally, it’s just presented an opportunity for criminals to take advantage of a program that doesn’t have a lot of safety measures in place,” said Cher Haavind, deputy executive director of the Colorado Department of Labor.

Article source: https://www.nytimes.com/2020/09/11/business/economy/pandemic-unemployment-assistance-fraud.html

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