Montana has sent over $1 billion in unemployment benefits to residents since the start of the pandemic. The state passed that milestone in October. As unemployment payments climbed during the pandemic, so did fraud.
Maureen is a nurse in Missoula. She says it’s been a tough year for her profession.
"I talk about COVID for 12 hours straight. The last couple weeks have been really hard."
We’re not using her last name because she’s concerned about her privacy. For a while, Maureen was picking up extra shifts because of the pandemic, sometimes working up to 60 hours a week.
"I’ve had to kinda stop for a bit now because the mental health fatigue is exhausting."
Then this summer, she started receiving letters about an unemployment claim she didn’t file.
"I got a letter, the first letter, saying that your claim for pandemic unemployment assistance was filed on August 6."
She called the state unemployment insurance fraud line first thing the next morning, and she says the team there took care of it right away. Still, she says she feels uneasy knowing that her information is out there.
The Montana Department of Labor and Industry says it’s paid unemployment benefits to over 107,000 Montanans since the pandemic began. While the number of people filing for claims has dropped significantly since the peak in April, more Montanans in early October were still filing for claims than at any point in recent years.
According to the labor department, there’s been $360 million in confirmed fraud that’s been stopped since the pandemic began. The department says it estimates about $3 million in fraud hasn’t been stopped. In 2019, the department data show it stopped over $3,200,000 in fraud and paid about $8,200 for fraud claims prior to detection.
Paul Martin, the unemployment insurance division administrator for the department, says unemployment insurance is a natural target for fraud right now because of the huge increase in payments being made, and his main concern isn’t individuals looking to take advantage of the situation.
"This is not your typical mom & pop fraud. This is sophisticated criminal organizations."
He says across the country and in Montana, criminal rings use stolen identities to apply for unemployment benefits and often operate outside the country. Martin says that has increased exponentially with the pandemic recession and can happen to anyone, in the same way that identity theft can.
"No one was ready for a pandemic across the nation, and unemployment insurance programs got hit."
Martin says identity theft was already a tough problem to fight because it’s grown a lot in a short amount of time, which is easy to see as big data breaches like the Equifax or Target hacks become more frequent in the news. That was already forcing the state labor department to pivot and adapt a system mostly built to catch individuals committing fraud, not organizations.
Martin says he’s had to quadruple his fraud team and increase the department's claims processing staff. He also says that fraud attempts didn’t slow down after the extra support provided by the federal CARES Act ended in July.
"What criminals are assuming is Congress is going to do something with an extension of the CARES Act. So what they're trying to do is get a claim in place where it may pay out down the road."
Martin adds that he doesn’t want to see the focus on fraud detract from legitimate applicants’ access to the benefits.
Alix Gould-Werth is the director of family economic security policy at the Washington Center for Equitable Growth. Gould-Werth says that her organization has seen the same problem with fraud rings play out across the country and state governments struggle to keep up.
"The process of trying to get unemployment insurance is totally antiquated, and really difficult to navigate."
She says that the deluge in applications intensified those issues that were already there.
"There have been these really long delays and wait times. People have been turning to paper applications. The questions that are asked are very confusing. It's hard to change your password."
Gould-Werth says that on top of the stress recent demand has put on the system, she sees state governments across the country focusing too much on detecting fraud and not enough on getting benefits to people who need it as quickly as possible.
"Individual people are going hungry, they're being evicted, and they're really not having the money in their pockets that they need to make ends meet."
She says it’s important to remember that it’s impossible to catch every case of fraud and at the same time, the extra money in people’s pockets that these benefits provide is crucial to the country’s economic recovery.
If you suspect that you might be the victim of unemployment fraud, the Montana Department of Labor and Industry says to call its fraud hotline at 406-444-0072. It also advises that anyone submitting an unemployment claim only use websites that end in "mt.gov" and know that you will never be asked for money to file a claim.