California’s embattled Employment Development Department says they have seen yet another wave of fraud attempts. This time, again, hitting unemployment claims.
The fraudsters flooded EDD with unemployment insurance claims filed by paper and fax – including as many as 47,000 potentially fraudulent claims earlier this month.
EDD would normally expect to receive roughly seven thousand such applications in that timeframe. EDD did not pay the potentially fraudulent claims and its action prevented up to $560 million in potential unemployment insurance fraud.
Special Counsel McGregor Scott, named by EDD last year to coordinate investigations into EDD related fraud, has cited several sources for the scams, including transnational and domestic organized crime, prison inmates and grifters, or people who constantly look for ways to steal from the government.
“EDD’s tough new fraud filters thwart a constant stream of new fraud attempts, schemes and criminal tactics” said EDD Fraud Special Counsel McGregor Scott. “These criminals again tried to pierce the Department’s defenses but we stopped them dead in their tracks,” Scott added.
The work of fraudsters in this case will likely slow claims for some paper-filing claimants as EDD separates the fraud attempts from legitimate claims. EDD is mailing notices to all paper and fax benefit applicants to quickly identity any legitimate claimant and disqualify all fraudulent ones.
EDD encourages Californians to stay vigilant against scam attacks. Scammers attempt to get personal information in many sophisticated and creative ways. Scammers may “phish” for victims by pretending to be banks, stores, or even government agencies. They do this over the phone, in e-mails, by text message, in the regular mail, and by other communications forms. Once scammers have stolen this information they may attempt to file false benefit claims.
The mailed notices explain that an issue must be resolved before any benefits are paid, and include information about fraud reporting. Any legitimate claimant who receives an EDD notice should respond with the requested verification right away and EDD will review and process the legitimate claim.
Some Californians may receive multiple notices from EDD if a scammer tried to file multiple claims in their name. EDD’s mailed notices are part of its fraud fighting system and help warn potential identity theft victims that fraudsters are attempting to use their personal information.
The biggest earlier abuses occurred in the federally-funded Pandemic Unemployment Assistance program (PUA), created early in the pandemic by Congress and President Donald Trump. It was intended to help those who did not qualify for traditional unemployment, such as independent contractors. An estimated $20 billion has been lost to those fraudulent California claims, according to EDD estimates.