Ohio has done a relatively good job fighting unemployment fraud, private sector aides say


COLUMBUS, Ohio — Private sector figures who worked with Ohio’s much-criticized unemployment system to curb a massive wave of fraudulent claims defended the state’s anti-fraud efforts in a legislative hearing Thursday.

Even though it took nearly a year after the onset of the coronavirus pandemic before state unemployment officials took action to reduce the bleeding of hundreds of millions of dollars from fraudsters, Ohio s ‘is “remarkably good” compared to other states because it took “very quick” action, testified Haywood Talcove, president of LexisNexis Risk Solutions.

Unemployment fraud in Ohio has declined significantly since March, when the Ohio Department of Employment and Family Services agreed to multi-million dollar contracts with LexisNexis and other companies to provide anti-fraud services. Governor Mike DeWine also called on private sector executives to help ODJFS fight fraud and deal with the unprecedented number of jobless claims the state received during the COVID-19 crisis.

Ohio unemployment officials have known since the summer of 2020 that they were the target of large-scale con artists, according to State Auditor Keith Faber’s office, who says ODJFS kept the extent of them from them of fraud at the time.

But other states have taken even longer to act, Talcove told cleveland.com after speaking to the Council for the Modernization and Improvement of Unemployment Compensation, a legislative committee set up to examine system problems. He pointed to Illinois’ unemployment program, which only implemented security features – such as multi-factor authentication – last week that Ohio has been using for months.

Talcove told the council that the roughly $ 500 million Ohio allegedly gave crooks through bogus unemployment claims was only the 37th highest amount lost among the 50 states. In contrast, last January, California paid criminals up to $ 31 billion in benefits, which Talcove said came mainly from countries like Nigeria, Romania, China and Russia.

“Getting to where you took so long was pretty darn impressive from where you started,” said Talcove, noting that Ohio’s unemployment system still uses a computer system that dates back to 2004.

However, he said, fraudsters – who he says frequently work for “transnational criminal groups” – constantly try to bypass new security features, including sending emails to their elected officials. come across as voters seeking help with their unemployment claim.

State Representative Derek Merrin, a Republican from the Toledo area on the council, expressed skepticism about Talcove’s testimony. “You are in fact the first person I have heard before this committee compliment [the Department of] Job and Family Services, ”said Merrin, who asked how much money LexisNexis was getting from Ohio taxpayers (the original contract was for $ 2 million).

“I almost have to rethink what we do even here (as a board) if they do such a good job,” Merrin added.

Jeff Ficke, who heads a public-private partnership team set up by Gov. Mike DeWine to help the state’s unemployment system, said officials had to “work around the clock” to deal with the fraud described by Talcove and keep improving security features to fend off criminals.

“What works today won’t work in 24 months, and we have to continually work on offense and defense to make sure we’re doing the right things,” said Ficke.

Ficke said that when Ohio took steps to prevent criminals from claiming benefits, including multi-factor authentication, scammers instead began to focus on hijacking legitimate unemployment accounts and redirecting money from Ohioans to themselves.

There are “so many different ways” that Ohioans can unknowingly allow crooks to access their account credentials, Ficke said, by clicking on a text message or downloading an infected app on their computer. telephone.

Starting Friday, ODJFS will begin accepting claims from Ohioans for benefits lost to account hackers.

The end of federal unemployment assistance benefits in the event of a pandemic on September 4 will also reduce the number of fraudulent claims Ohio receives, as the program required fewer documents than traditional unemployment benefits and was available to the self-employed. who by definition had no employer available to verify their employment status.

However, when the ODJFS sent out 2.7 million form letters informing all benefit claimants that federal benefits were ending, the letters inadvertently informed many Ohioans for the first time that their personal information was being exploited by crooks. . The ODJFS has set up a special form allowing people to declare having received such letters.

Ficke also touted improvements in two other major problems with Ohio’s unemployment system – delays in issuing benefits to people and long waits for people to talk to someone at the clinic. calls for state unemployment.

The state has cleared its backlog of initial, unprocessed claims, Ficke said, allowing employees to instead focus on determining whether reported claims for potential fraud are legitimate or not.

According to ODJFS data, the average wait time to speak to a traditional unemployment benefit call center representative fell from an average of 10 minutes and 54 seconds in May to 35 seconds in August. However, it jumped to more than 3 minutes in September, likely due to issues related to federal benefits and overpayment letters that were sent, according to department spokesman Bill Teets.


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