Comments on: States fiddle while defrauders steal

States lag in investing in systems to detect fraud, which will cost the public big-time, warns SurePayroll President Michael Alter.

[twyrick]

What facts back this up?

I question the validity of this story. For starters, the figures presented seem to be an absolute worst-case scenario. In my state (Missouri), for example, you are required to report to your unemployment office every 4 weeks for "in person reporting", or else your benefits are withheld. Failing to report in person for 2 consecutive weeks means your benefits are automatically terminated. The maximum amount paid out per week is $250, not $400. And it seems they randomly require additional measures from some applicants, including possibly having to report for training/education or job search assistance on a certain scheule. Failure to meet all of these requirements again means termination of benefits. There is also the requirement that applicants apply for at least 3 jobs per week, and keep a log of contacts. Again, this is probably not normally looked at, but they do reserve the right to demand it be presented to them. (I suspect they randomly request these detailed job search logs from a certain percentage of applicants.)

Doesn't sound to me like an easy way to fraudulently collect paychecks! A scammer would have to report in-person 100 different times a month, at the bare minimum, to perform the fraud in this story's example. (And with only a handful of local offices, I'd assume he/she would quickly get noticed too!)

I find this difficult to believe

This is being debated on http://slashdot.org via the article:

http://yro.slashdot.org/yro/05/06/24/1225257.shtml?tid=103&tid=158&tid=123

Things just aren't adding up here. In my eyes, there are too many checks in the system for this to happen. For instance, the unemployment office typically needs a face-to-face meeting with the person. It'd be interesting to find how all these people get around that. It'd take a very talented con-artist in my eyes to really steal from multiple accounts.

Additionally, they check with your company to verify whether you are eligble for unemployment. How are they getting around this?

The article describes people collecting for unemployment while working in another state. How many people are going to travel to another state just to defraud unemployment?

Also, have you checked the penalties for frauding the state unemployment systems lately? They were pretty steep the last time that I looked (~35K, IIRC, plus any criminal charges). That's not tough enough?

Based on the above, I'd say that the numbers that are being described are most likely overinflated.

[ka1axy]

How would this work?

In MA, your SSN is checked against a quarterly list of SSNs submitted by your former employer, to verify that you worked for them for enough quarters to collect benefits. Last time I was laid off (a few years back), the qualification process was stringent, and there was much mention of penalties for providing false information. I know they checked up, because my state-issued unemployment benefit statement listed how much the company had paid me for the four previous quarters. This was information that could only have been obtained from my former employer.

To pull off this fraud in MA, the fraudster would need to link the stolen SSN to a particular company, then somehow get someone at the company to lie to the state about that SSN having been laid off, when in fact, the (real) person was still employed. It just wouldn't work in this state.

I'm not convinced. This article reads more like an advertisement for fraud detection services or software that probably isn't needed by most states or employers.

Can this happen in California? MORE DOUBTS!!!

Here in CA, when one goes on unemployment, the last employer is contacted and must give some kind of consent. He pays into it so he must approve of it. If the employee was fired with cause or quits, then the unemployment is turned down. So, if somebody were to apply for unemployment in my name, I'd think my boss would want to know what was up since I was sitting at my desk being very employed.

Somthing is fishy in this story

[alphtoo]

And here in S.C....

Unemployment compensation applications are handled in a similar fashon as described for California. Larger employers routinely challenge every claim, I presume in order to keep their premiums down. In short, I just don't see how this could be done in this state. Of course crooks have many tricks I don't know about; I learn about new ones often.

I don't doubt for a minute that governments' security programs are grossly inadequate to deal with the level of evil so rampant in society today. However if the problem this article covers is as common as is claimed, such theft would involve a whole lot more than showing up at the local state employment office with somebody else's SS number.