NBC 5 Responds

NBC 5 Responds: Spike in Fraud Involving Unemployment Benefits Amid Pandemic

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More and more people across the country say scammers are using their personal information to file fraudulent unemployment claims, denying them desperately needed payments.

Experts say the bogus claims are clogging systems and slowing payments for everyone. How widespread is it? No one knows for sure. What Michele Evermore, an employment policy analyst at the National Employment Law Project does know:

“It’s a huge problem because it's going to slow benefit delivery to people when the systems are already under duress,” Evermore said. “This is the most despicable thing I can imagine doing right now. People are legitimately out of work, or legitimately in need of money.”

The scam is impacting hundreds, including like Meka Hughes, a recently laid off recruiting coordinator and suburban single mom, who needs benefits to make ends meet.

“It's frustrating and it's frightening,” Hughes said.

For Hughes, the trouble began with an unexpected letter from the Illinois Department of Employment Security.

“Out of the blue a letter that said that they were trying to pay me. But they didn't have the correct payment information. It didn't match my bank account. And so I thought 'that's strange,'” Hughes recalled.

When she could not get in to her own IDES account, which was apparently locked by thieves, Hughes started dialing the state helpline: an astounding 1500 calls in one day.

“They say well we're busy we can't take your call right now, and they just hang up,” Hughes said.

When her speed-dialing finally got her a human:

“They gave me the number. This number doesn't work. There isn't a queue, you can't hold you can't leave a message, it lists the outgoing message saying that the office is closed and it hangs up on you. I don't have a means to report the fraud,” Hughes explained.

Wes Smith says he’s had similar problems reporting a fraudulent claim to IDES. The employed financial planner, who lives in Wilmington, says he hasn’t filed for unemployment in decades – and doesn’t need to now.

So when his employer handed him a letter to verify his unemployment, Smith says he became suspicious.

“It was a notice of claim to charge for benefits, and I had not filed for benefits,” Smith said.

The last time he did? George H.W. Bush was president, but even still, Smith also found himself locked out of his state account.

“My employer checked the box on the letter and faxed in back to IDES saying that I'm still employed. I've also sent an email through their website, saying hey there's something fishy going on here, please contact me, but I have not heard back,” Smith said.

Illinois isn’t the only state having issues. A recent spike in questionable claims in Washington state forced a temporary suspension of payments. The federal investigation that followed revealed an overseas network of thieves is likely behind the scheme, stealing hundreds of millions of dollars earmarked for the unemployed in several states.

The scams come on the heels of a department of labor watchdog report flagging a lack of fraud preparedness on a federal and state level.

NBC 5 Responds shared Smith and Hughes’ cases with the state, and asked: how it can investigate fraud, if these victims say they can’t even report it?

A spokesperson says the agency cannot discuss individual cases but it “investigates all matters of fraud.” And “fortunately for IDES and taxpayers, the employment system does have built-in safety nets to detect, stop and pursue” fraudsters.

Which to Hughes defies logic: what good are safety nets if victims’ voices are never heard?

“I feel like the system is broken,’ Hughes said. “So it's an endless loop, without being able to get anywhere. This is an emergency and I don't feel like they really respect that sense of urgency.”

IDES says fraud is part of all employment of systems and recognizes it can be particularly egregious during trying times. We asked the agency how many fraud claims have been filed and investigated in Illinois. A spokesperson told us that information isn’t readily available, but says it is focused on increased productivity, processing claims, and paying benefits as quickly as possible.

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