As a result of robust fraud prevention and detection efforts, today the Rhode Island Department of Labor and Training (DLT) announced that it has stopped an estimated $3.2 billion in unemployment benefits from being paid out to fraudsters over the course of the COVID-19 pandemic.
“Across the country, fraudsters have been taking advantage of the financial lifelines provided through state unemployment insurance programs,” said DLT Acting Director Matthew Weldon. “Rhode Island has not been spared. We take the issue of unemployment fraud very seriously and are committed to doing everything we can to combat it.”
Over the past year, DLT has worked with cybersecurity experts, state and federal law enforcement agencies, the U.S. Department of Labor, and counterparts in other states to develop and refine anti-fraud techniques. All unemployment insurance (UI) claims are screened for a number of indicators that are common marks of fraudulent claims. When a claim comes in that is likely to be fraudulent, it is immediately stopped. If a legitimate claim is inadvertently frozen, the claimant is provided a straightforward online platform and direct phone line to use to verify their identity and reinstate their benefits.
“We have taken great care to ensure that our anti-fraud efforts pose minimal hindrance to legitimate claimants who are reliant on unemployment benefits to provide for themselves and their families during this economic crisis,” Acting Director Weldon added.
DLT has stopped a total of 426,643 suspected fraudulent unemployment claims from March 9, 2020 to March 1, 2021. Of these, 56,365 have been confirmed to be fraudulent. Thanks to the Department’s proactive efforts, the majority of fraudulent claims are stopped before any payments are made. 326,319 likely fraudulent claims remain stopped and under investigation, and 43,959 suspected fraudulent claims have since been confirmed to be legitimate and unfrozen.
To date, $37.6 million has been paid out to confirmed fraudulent claims, out of the $2.8 billion that DLT has paid out in total unemployment benefits since the beginning of the pandemic. $209.6 million has been paid out to suspected fraudulent claims. Of the total amount paid in suspected and confirmed fraud, less than 25 percent came from the state trust fund, and over 75 percent came from federal funding sources. $3.5 million in fraudulent payments have been recovered to date, and efforts to recover additional funds are ongoing.
UI fraud is a nationwide issue that all states, including Rhode Island, have been combatting since early in the pandemic. Fraudsters use information that was previously stolen from outside sources to illegally file for unemployment benefits under someone else’s identity. DLT has been working closely with the Rhode Island State Police and federal law enforcement to share information on fraudulent claims to support their criminal investigations.
Anyone who receives a letter or email from the Rhode Island Department of Labor and Training regarding unemployment benefits that they did not apply for is encouraged to report it to the Rhode Island State Police on their website. In addition, they should file an identity theft report with the Federal Trade Commission (FTC) at identitytheft.gov, and periodically review their credit report to ensure no new fraudulent activity has occurred. Full guidance for UI fraud victims is available at dlt.ri.gov/fraud.
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