DLI prevents millions in fraudulent UI payments, bolsters fraud detection, prevention

The Montana Department of Labor & Industry (DLI) today announced that the agency has prevented over $220M in fraudulent Unemployment Insurance (UI) payments since April 28.

DLI has begun implementing additional identity verification measures to help combat an increase in criminal activity due to a sophisticated national unemployment fraud scheme related to the COVID-19 pandemic. Due to these measures, certain unemployment claimants may be asked to provide additional identity information to verify the validity of their claim.

“Through additional steps taken to prevent fraud, we’ve been able to stop this widespread scheme to take advantage of the pandemic,” Acting Commissioner Brenda Nordlund said. “While we have successfully prevented a large amount of fraud up to this point, we are continuing our efforts to stop fraud from occurring, while ensuring all eligible Montanans receive the benefits they deserve.”  

Since mid-May, DLI has experienced a significant rise in UI fraud, resulting from a national unemployment fraud scheme using stolen personal information from external data breaches. From April 28 to June 7, DLI has identified over $10M that has been paid out on possible fraudulent UI claims. DLI is working with law enforcement, the U.S. Office of Inspector General, and banking institutions to coordinate the recovery of these fraudulent payments.

“While the program integrity measures we are taking mean that some Montanans will experience temporary delays in payment, by approximately one week, we believe these steps are necessary to respond to this unemployment scam,” Nordlund said. “We are working rapidly to respond to this scheme and urge individuals who may have had a false unemployment claim filed in their name to contact the Department.”

DLI is working to ensure Montanans are paid the unemployment benefits they are eligible for while protecting against fraudulent activity. In addition to the identity verification measures, the following fraud prevention steps have been taken:

  • Quadrupled the number of staff members on the UI fraud investigation unit.
  • Aggressively using data analytics to cross-match potential fraudulent information with other state agencies, the National Association of State Workforce Agencies Integrity Center, and other states across the U.S.
  • A new phone line for calls from the public regarding UI fraud has been released at 1-888-556-4677.
  • Denial of any claim that indicates fraud.

DLI is encouraging those that receive a UI identity verification letter and have not filed for benefits or believe they may be a victim of unemployment or identity fraud to report it at http://uid.dli.mt.gov/report-fraud immediately. The Federal Trade Commission’s identity theft website at identitytheft.gov also provides resources and a detailed step-by-step process for reporting and protecting against identity theft.

Those that are victims of unemployment fraud are not required to repay the stolen money. Those that are victims of fraud and then must apply for UI benefits are still able to do so.

DLI thoroughly investigates all reports of potential, alleged, or suspected fraud. Those found to have committed UI fraud are subject to penalties and/or criminal prosecution.

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