While the government has been doling out billions in extra benefits during the COVID pandemic, it has also been losing billions in fraud. The Labor Department estimates the federal government lost some $60 billion on fraudulent unemployment claims just in the past year, with other estimates putting the total at or above $200 billion.
The basis of most fraudulent unemployment claims is identity theft, a problem that has been growing for years but has exploded since the start of the pandemic. "In 2019 we had a total of 19 (identity theft) cases, in 2020 we had well over 700 cases," says Eva Velasquez, CEO of the Identity Theft Resource Center. "That 4,800% increase that we saw in 2020, we are well on pace to surpass that in 2021."
Rampant unemployment fraud has become an issue in nearly every state, including Texas, since the federal government loosened the restrictions on who qualifies for jobless benefits and added an extra $300-per-week on top of state benefits. Velasquez blames what she calls a "confluence of events" for the explosion in fraud and abuse. "We did not have the resources invested into good cyber security and IT technology systems, and then you add to that the expansion of the benefits, and the expansion of the amount the benefits are worth," she says. "And the biggest factor is the state of data breaches in this country...all of this data was already out in the wild, just waiting to be used."
Velasquez believes identity theft and fraud are now the worst she's seen in the 20 years she's been involved with the issue. "I would say that we're in a crisis and it is escalating," she tells KTRH. "My hope is because it's so terrible right now, that we would start making the things that stop the fraud a priority."