Unemployment agency sees spike in fraud efforts over the holidays

Public, employers urged to be vigilant in spotting suspicious activity

The holidays are a time when criminals see a ripe opportunity to file fraudulent unemployment benefit claims and this past Christmas and New Year’s season was no different.

Over the past few weeks, the Michigan Unemployment Insurance Agency (UIA) has seen a spike of more than 10,000 claims it has identified as likely being fraudulent, coinciding with the traditional time when manufacturing companies reduce hours or shut down for the holidays. Often using stolen identities, criminals see an opportunity to file claims amidst the swell of legitimate claims from workers who experience an interruption in work hours.

UIA warns Michiganders to be vigilant about any suspicious activity they notice involving their personal identifying information. When a claim is identified as fraudulent, no payment is made and the UIA will send a letter by U.S. mail to the address on file to confirm identity or other key information.

If you receive such a letter from the UIA but have not filed a claim, report the fraudulent activity right away:

• Go to Michigan.gov/UIA.
• Click on Report Fraud or Identity Theft under the Fraud and Identify Theft topic.
• Follow the instructions, complete Form 6349 Statement of Identity Theft and submit it online.

Employers are also urged to review their monetary determinations, which often note UIA cannot confirm the identity of a claimant. A timely response to such a notification helps to quickly resolve identity theft cases.

If the claim is determined to be fraudulent following a detailed investigation, a second letter will be sent by mail that will state the filed claim is null and void.

UIA will continue to be vigilant in its fight against fraud, with help from the public and employers as well as using the many resources at its disposal in a holistic approach to identify and stop fraudulent claims.

Last week, Gov. Gretchen Whitmer announced the Unemployment Insurance Fraud Response Team, which solidifies the coordination among state departments and law enforcement partners to identify, investigate and prosecute those accused of filing fraudulent UI claims.

The UI Fraud Response Team builds on the efforts of Attorney General Dana Nessel's previously established Michigan Unemployment Insurance Fraud Task Force. The work of the Task Force has resulted in 54 Michiganders being charged with UI fraud by either state or federal authorities – in some cases netting millions of dollars – with 37 cases pending since June 2020. Nine people have pleaded guilty or been convicted and three have been sentenced. Those accused of facilitating fraud include five UIA employees or contract workers.

Other resources and procedures the UIA employs include: 

• Using Fraud Manager software to analyze claims at filing and certification, flagging irregularities or other suspicious patterns.
• Following procedures to resolve matters for victims of identity theft in real time. 
• Retaining experts, as needed, to counter criminal attacks on the UI system, analyze fraudulent unemployment activity, and clear legitimate accounts.
• Leveraging tools provided by the Integrity Data Hub of the National Association of State Workforce Agencies (NASWA) to identify foreign IP addresses, suspicious email domains, multi-state claims and other tip-offs to fraud. Michigan was one of the first states to join the initiative.
• Marshalling resources, processes and stakeholder partnerships to identify potential fraud cases and deploy new technologies to supplement existing identity proofing tools.
• Planning for UIA's participation in the U.S. Department of Labor’s (DOL) Tiger Teams anti-fraud initiative, which taps multi-discipline experts including fraud specialists. 
• Collaborating with DOL and NASWA to track trends and emerging fraud schemes perpetrated by multi-state criminal enterprises.

Helpful information on identifying fraud, how to report cases of fraud and identity theft, and what the UIA does to combat fraud can be found on the Agency’s What is Fraud webpage.