DENVER – Officials with the Colorado Department of Labor and Employment said Thursday they continue to see increasing reports of unemployment fraud involving Reliacards being sent to people who have never filed for unemployment benefits as claims continue to come in at levels at or above those seen during the Great Recession.
The CDLE said the Reliacards, which are debit cards to which people’s unemployment benefits are credited if they do not sign up for direct deposit, are being utilized by fraudsters who are often taking advantage of people’s stolen identities.
As such, the CDLE officials said, they have seen increasing reports of people who have never applied for unemployment benefits receiving multiple Reliacards.
Officials are asking people to deactivate the card first by calling the number on the back, then notifying the department either by phone or on the CDLE’s website. Once a report has been made, people who receive the fraudulent cards are asked to alert the three credit reporting agencies, file a police report, notify the Federal Trade Commission, and document everything along the way.
Unemployment Insurance Division Chief Jeff Fitzgerald said that CDLE employees have a tool used by states and territories where information can be put in regarding fraudulent activities to be crosschecked with unemployment claims.
Much of the fraudulent activity has centered around the Federal Pandemic Unemployment Assistance program for gig and self-employed workers, the CDLE officials said.
“When the facts being presented to demonstrate the claim are basically one-sided, in that they are based in large part on self-attestation, it provides an easier path to leverage stolen identities and submit fraudulent claims,” Fitzgerald said.
A man named Wayne, who spoke with Denver7 on the condition his last name not be used, had never filed for unemployment, but received five Relicards in a span of three days – all with his address, but none with his name.
“I feel bad if these are really – if they’re for realy people and they didn’t get them,” Wayne said. “I want to make sure they get them.”
Another Denver7 viewer said he received 19 of the cards in the mail – none with the proper name. Even the chief investigative reporter at WEWS, the Scripps-owned station in Cleveland, Ohio, had a Reliacard show up in his mailbox with an unemployment claim from Pennsylvania and had to freeze his credit.
“You need to stop it right away and you need to put a fraud alert, a credit freeze, and make sure you’re safeguarding your identity because your identity is now out there,” said the reporter, Ron Regan.
U.S. Bank says it only issues the cards as directed by state unemployment agencies.
“Anyone who receives a ReliaCard related to unemployment benefits they did not apply for should destroy the card, notify the state unemployment agency of potential fraud, and take precautions to mitigate the risks of potential identity theft,” said U.S. Bank spokesperson Kristin Kelly.
CDLE Deputy Executive Director Cher Haavind said the department was increasing the size of its investigations unit – which is working on “thousands of instances” of fraud, including some wider national fraud rings, along with the Secret Service and other federal and local agencies, she said.
Haavind said that once fraudsters were found, they would be prosecuted.
Fitzgerald said that on any given week, the state is stopping between 30% and 50% of fraudulent unemployment activity before it gets to the system, which he said was not unusual. He added that other states were likely getting even more fraudulent activity.
Phase 2 of Google virtual tool launches
The department officials also explained how the second phase of the Google virtual tool it is utilizing to help answer people’s questions about their unemployment benefits works.
The second phase of the tool, which went online Wednesday night, will be able to answer more specific questions from users related to their particular claim, benefit payments and more.
Haavind said that the department had seen about 350,000 sessions since the first phase of the virtual tool launched mid-July. Both she and Fitzgerald said they believed the tool was performing better than was expected in answering people’s questions, and that they hoped the second phase would reduce the number of callbacks the department needs to make, which are currently booked out until early September.
Haavind said that they will be emailing and calling people who are currently awaiting callbacks to let them know about the second phase of the tool and that it might be able to address their needs more quickly.
Unemployment trust fund status
Last week, 7,138 Coloradans submitted regular initial unemployment claims, and 7,585 PUA claims were submitted. CDLE Senior Economist Ryan Gedney said that approximately 614,000 Coloradans have received an unemployment benefit payment thus far in 2020 – about 20% of the number of people who were employed in the state in 2019.
The state paid out another $85 million in regular benefits last week. Gedney said the department is still forecasting the state’s unemployment trust fund to be insolvent by later this month – saying it currently has between $75 million and $100 million in funds.
Gedney said that Colorado was one of eight states that have made loan requests to the federal government in expectations it will have to borrow at zero interest through the rest of the year, as it did when the trust fund went insolvent during the Great Recession.
Currently, 10 states and the U.S. Virgin Islands are already borrowing from the federal government.
The CDLE officials said they still “know nothing” about what Congress might decide to do about a possible extension, or modification, of the Federal Pandemic Unemployment Compensation program that gave anyone on unemployment another $600 a week.
The department said an estimated 400,000 people in Colorado were impacted by the expiration of the $600 a week added benefit, which they said put about $150 million a week into the state’s economy.
The officials said depending on what plan finally moves forward, they would have to re-program their systems if it is not a continuation of the $600 a week program, which they said could take weeks or longer.
