In Brief

N.J. Labor Department has stopped $5.4B in fraud claims

By: - January 24, 2022 6:30 am

(Mary Iuvone for New Jersey Monitor)

The state Labor Department says it has stopped more than a half million potentially fraudulent unemployment claims since the start of the pandemic, an amount that would represent more than $5.4 billion in losses.

Spokeswoman Angela Delli-Santi credited ID.me — a company specializing in identity proofing that is used by more than 25 other states — with catching the fraudulent filings.

“The pandemic – and the infusion of billions of dollars in federal pandemic benefits – caught the eyes of would-be felons across the globe. States across the country saw new kinds of attempted fraud (international fraud rings trying to infiltrate unemployment systems), and thus needed new tools to stop it,” Delli-Santi said.

More than 183,000 New Jersey claimants have confirmed their identities using the tool since it launched in March 2021. That’s less than a third of all claimants who were asked to verify through ID.me, leaving 529,000 flagged claims as potential fraud, she said.

New Jersey, like the rest of the nation, was deluged with a torrent of unemployment claims when the pandemic started.

Some claimants have reported issues with ID.me on social media pages set up for unemployed residents to help each other. Others have said their claims were flagged as fraud incorrectly, and are being asked to pay back money, but can’t reach the Labor Department to settle the disputes.

Claimants should not be submitting their information to ID.me unless the Labor Department asks them to do so.

Delli-Santi declined to comment further  on anti-fraud measures, citing security concerns.

“Suffice to say, New Jersey works with our partners in Washington, has increased its anti-fraud staff, and has many tools at our disposal to make sure only legitimate claimants receive benefits,” Delli-Santi said.

A pilot program will launch later this year in New Jersey and Arkansas aimed at modernizing the unemployment system, including rooting out identity theft and other fraud issues.

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Sophie Nieto-Munoz
Sophie Nieto-Munoz

Sophie Nieto-Muñoz, a New Jersey native and former Trenton statehouse reporter for NJ.com, shined a spotlight on the state’s crumbling unemployment system and won several awards for investigative reporting from the New Jersey Press Association. She was a finalist for the Livingston Award for Young Journalists for her report on PetSmart's grooming practices, which was also recognized by the New York Press Club. Sophie speaks Spanish and is proud to connect to the Latinx community through her reporting.

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