TUCSON, Arizona – Thousands of Arizonans fell victim to identity theft during the pandemic, resulting in delayed or denied payments and financial havoc.
One expert says a simple modernization and security upgrade of Arizona’s decade-old unemployment insurance program could have saved victims the hassle and the state billions of dollars, according to the Arizona Daily Star.
A plan for this is in the works.
The State Department of Economic Security will begin this month in accepting proposals for a contract with one or more companies to modernize the unemployment insurance benefit system.
With an unprecedented number of Arizona people unemployed during the pandemic, people were forced to rely on state unemployment insurance, the then-new pandemic unemployment benefit program, and other forms of state and federal assistance.
DES worked with federal, state and local partners during the pandemic to provide support to people affected by job loss and other COVID-related issues, and improved existing programs to meet increasing demand for services and continue the work, the Star reports.
The division will use funds from the Families First Coronavirus Response Act, the American Rescue Plan Act of 2021, and a “small surplus in a UI administrative fund” to pay for the technology upgrade, a decision made based on pandemic demand, DES director said Michael Wisehart.
The state will endeavor to find additional funds in the 2023 budget to close possible funding gaps in the overall project.
“The age and complexity of the existing UI system will cost the state significantly more over the years as we continue to maintain, adjust, and repair,” said Wisehart. “The system modernization does not only make sense from a fiscal point of view, it is a decisive investment in our workforce. It will help support those facing employment disorder as the rest of the workforce development system works with them to recover and find their place in the state’s economy. “
The benefits of modernizing the government system are undisputed and long overdue, said Haywood Talcove, CEO of LexisNexis Risk Solutions Government Group.
“What happened was completely preventable,” Talcove told the star.
In addition to an unprecedented number of unemployment claims, the pandemic also resulted in unprecedented fraud for a variety of reasons.
Data breaches before and during the pandemic resulted in “heaps of personal data being collected from adversaries,” Talcove said.
Arizona has also had job posting scams in which criminal groups posted good-looking ads on reliable job boards.
Thousands of unemployed Arizonans applied for these positions, received proper interviews, and were hired.
“Suddenly you have a job that pays significantly more than before,” said Talcove. “You’re excited then they say they need to verify your identity.”
With around 18,000 false job advertisements identified online, the impact has been catastrophic, according to the Star.
“Each identity they got was worth about $ 26,000. They found systems that were completely open, ”said Talcove.
While the total amount of fraud losses is still unknown, the U.S. Department of Labor has estimated losses of $ 87 billion nationwide, Talcove said.
The unemployment rate in Arizona fluctuated between 4.8% and 14.2% during the pandemic, according to statistics from the US Bureau of Labor.
LexisNexis estimates Arizona’s potential fraud loss at nearly $ 2 billion, pending full accounting.
Arizona DES spokeswoman Tasya Peterson said in an email to the star that fraudulent claims were a problem in all 50 states during the pandemic, but DES had taken “proactive and aggressive measures” to deter fraud in its programs and its systems have been expanded to include additional layers of protection to counter the evolving threat.