The COVID-19 pandemic has been felt by this society on a multitude of levels. One was that the virus has impacted people has been financial, with millions losing their jobs as a result of a largely halted economy. In return, millions have been applying for unemployment benefits to see them through this dark time. However, not every unemployment claim has been legal, with scammers applying for benefits in other people’s names. Fraud is occurring mostly in the Pandemic Unemployment Assistance (PUA) program, a product of the CARES Act which “gives states the option of extending unemployment compensation to independent contractors, gig workers, freelancers, and others who are ordinarily ineligible for unemployment benefits.”
Accordingly, states are taking action to prevent fraudulent unemployment claims. The latest to do so is the state of New York, which blocked $5.5 billion in fraudulent claims. Since the pandemic began, the Empire State has paid out more than $65 billion for unemployment. However, NY officials have found that 425,000 fraudulent claims have been made. “Unemployment fraud is – sadly – a scourge that we have to fight every day, but it is particularly despicable that criminals would use a global pandemic as cover to attempt to defraud our system,” said Labor Commissioner Robert Reardon. “These benefits have been a lifeline for millions of New Yorkers over the last year, and every day our Office of Special Investigations is working to protect our system from fraud and abuse.”
Though states are not exposing exactly how they are detecting fraudsters, it has been revealed that artificial intelligence and other high tech tools are being used to weed them out. “These benefit programs are clearly very outmanned and outgunned,” surmised Jon Coss in September. He is CEO and founder of Pondera Solutions Inc, a firm dedicated to fighting fraud, waste and abuse in healthcare and government programs. “You can’t do this with just people, you have to have machines. The other guys do.”
There are various ways scammers are trying to come up on some unemployment benefits. One of the most common is pushing through multiple claims from the same email domain or physical address. Fake companies are set up with fake employees, using stolen identities from people, a lot of them dead or incarcerated. Fake IDs are bought on the Dark Web with the identities of people in other states or countries. One claim that has come up (not specified where) stated that an eight-year-old boy had made $100,000 in the year.
High tech tools are the best way for the authorities to validate identities without slowing down the process. The powers-that-be are not revealing what specific technologies they are using as not to give their opponents an upper hand. “By using machine learning and AI, you’re actually able to identify new and emerging trends, even predict them with some sort of accuracy and stop them before they go out the door,” said Coss. “It’s like Whac-A-Mole. AI helps identify what hole they’re going to come out of next, so you can be there waiting for them.”