Stop Identity Fraud in Pandemic Unemployment Assistance Benefits

Many criminals took advantage of the pandemic and the CARES Act to line their pockets with other people’s money. For example, hackers and fraudsters have accessed and used other people’s personal information to enroll in the Coronavirus Aid, Relief, and Economic Security Act’s unemployment benefits.

Applicants for the unemployment benefits overwhelmed US state agencies, and many of these applicants were fraudsters. An article by the USA Today stated that agencies lost about 36 billion dollars to criminals filing unemployment claims using other people’s names. The recent surge of fraud revealed how vulnerable the government’s fraud prevention efforts are and why they need to be adjusted.

Congress added provisions for the CARES Act’s second stimulus package to mitigate the risk of fraudsters claiming others’ unemployment benefits. Under Section 242 of the Consolidated Appropriations Act of 2021, state agencies must verify the applicant’s identity. The Act also provides federal funding so the agencies can have the means to implement new identity proofing measures.

State agencies must invest in modern FIDO2 authentication solutions to comply with the Consolidated Appropriations Act of 2021’s requirements. While the Act does not specify what solutions the agencies must use, technologies with automated identity proofing, document authentication, and data analytics are ideal.

Investing in modern technologies requires agencies to switch over from their old KBA (knowledge-based authentication) solutions. This allows agencies to use device-based authentication and biometric identification solutions to verify if the applicants for the stimulus package are who they claim to be and if they are eligible.

Using modern data analytics allows agencies to streamline detection, interpretation, and communication of data patterns to detect fraud. Not using modern solutions and data analytics only invites hackers and fraudsters to take advantage of the state agencies’ vulnerabilities in their systems.

For more information on stopping identity fraud for the CARES Act, see this infographic by authID.


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