WMBF INVESTIGATES: Federal assistance program implemented in state, locals concerned over potential identity theft

Federal assistance program implemented in state, locals concerned over potential identity theft

MYRTLE BEACH, SC (WMBF) - The coronavirus pandemic has brought on a wave of joblessness for thousands of Americans. Varying forms of state and federal aid have been turned to for some kind of relief.

The latest form of federal unemployment aid, the Lost Wages Assistance program, is finally here in South Carolina.

But concerns arise over fraud and identity theft related to the benefits system.

Ron Tacqard and Tonya Reed reached out to WMBF Investigates after their regularly scheduled payment of federal benefits didn’t come through, and the reasons given to them, they say, were troubling. Reed explained she called DEW the next morning to understand what was going on.

“She started talking about identity theft,” Reed explained. “I’m like, ‘identity theft?’ She’s like, ‘Yeah, your license doesn’t match your address.’ I said, ‘Well, it should.’ She goes, ‘Well did you upload a license?’ I’m like, ‘Well, you just asked me if the address was the same.’”

After being sent to the fraud department, Reed was told to submit her ID online, without a concrete time for when her claim should be processed to provide funding.

Tacqard says his call brought up identity theft as well. He says he doesn’t understand why this wasn’t communicated to him beforehand.

“Supposedly identity theft and said I’d be cleared October 7, and I said, ‘Well, that’s not even happened yet? So how did you clear me? You haven’t even informed me,’” Tacqard said. “They should’ve contacted anybody and everybody.”

Reed and Tacqard have been out of demo and mechanic work during the pandemic, and although they didn’t qualify for unemployment insurance, they’ve been eligible for federal programs like Pandemic Unemployment Assistance (PUA) and the recent Lost Wages Assistance program (LWA) to care for their family.

“Why didn’t they notify us?” asked Reed. “If there was identity theft, why didn’t you notify us?”

The LWA program was approved for South Carolina at the beginning of September to bring in an added $300 each week to claimants for 6 weeks - meaning, in total, those who qualify have the capacity to receive $1800. DEW announced it would take several weeks to roll out the program as the agency worked to both implement and “protect claimants from the growing problem of criminals attempting to defraud Unemployment Insurance (UI) programs around the country.”

With LWA, according to DEW, additional security measures were put in place, including new ID verification questions.

In the news release, DEW also said they were working to combat fraud by:

  • Actively onboarding additional fraud analysts to increase impact and expertise.
  • Working closely with state and federal authorities to maintain an open line of communication regarding active fraud schemes and prevention tactics.
  • Open communication with other states agencies like DEW to share data, best practices and schemes being detected in other parts of the nation.
  • Cross matching of data against known fraudulent identifiers, as well as national suspect activity deemed fraudulent.
  • Actively participating in identity proofing through the National Association of State Workforce Agencies.

“To speak to the information that was relayed to the constituent based on the scenarios that you provided - that kind of goes to how information could be misconstrued in terms of what our initial take is," said Brian Urban, deputy assistant executive director for the Unemployment Insurance division with DEW, who also oversees fraud and prevention efforts.

"But the key part of it is is to make sure that that information is both tracked and documented by our staff to get that over to my subject matter experts so they can take the necessary action,” he continued.

The department had less than a month to implement LWA, and it’s one they wanted to get right.

“How LWA presented a new challenge was if fraud was identified as present or payments were paid out erroneously, states would be held accountable to reimburse those dollars to the federal government," Urban explained. “So in a sense, we were financially liable for any fraudulent activity that we didn’t identify within our program.”

Urban also said the department had already been working to beef up security in the system before the efforts made to implement LWA. Urban said that they are continuously doing vulnerability assessments on their system to ensure that security breaches don’t happen or have the possibility to.

On Friday, Tacqard said he found that LWA did come through on his account, despite, he says, being told it would take weeks for his account to be fully processed after identity theft.

In response to this scenario, Urban said, “We put key indicators within our systems to ensure that if there is suspect behavior on an account like a social security number or whatever the case might be - that these areas are flagged - and that could quite possibly be what this individual was subjected to.”

Uban also explained that anytime they suspect fraudulent activity within a system, they immediately do a stop-process which locks down a claim so they can investigate.

He speculated that in this scenario of payment being seen now in the system, it could mean they had concluded in their investigation that those benefits were indeed due.

When asked if it’s possible to know how many people were notified that identity theft had occurred, he said it’d be premature to quantify numbers because of active investigations.

WMBF Investigates will continue to follow up on any numbers that could be released regarding identity theft in the system.

Urban said with the implementation of the LWA program this week, the agency is paying out over $37 million.

“There’s a great number of South Carolinians that have $37 million that they can put back into the financial economy,” he said.

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