NJ Expanding Its Unemployment Insurance Anti-Fraud Efforts

Today, the New Jersey Department of Labor and Workforce Development has launched a new initiative to stop fraudsters from depleting New Jersey’s Unemployment Insurance Trust Fund. It’s designed to add another layer of protection to anti-fraud programs that already have saved the fund $153 million within the past 18 months.

Using state of the art technology, the Labor Department is introducing a new tool to its anti-fraud arsenal with a system that requires people who file for Unemployment Insurance benefits to answer a series of multiple choice questions that will allow the state to confirm their identity before clearing payment on a claim.

The computer-based system is designed to prevent identity thieves from filing phony unemployment claims using the stolen identities of innocent and unsuspecting victims, which is a common type of fraud used to raid Unemployment Insurance funds around the nation.

The new program is called “Identity Proofing.” When a person files an Unemployment Insurance claim, providing the Department of Labor with his or her name and other legally required information, the new system conducts an instant search. It matches the information provided by the claimant against data the system electronically pulls from public records related to the name and identifying information provided by the claimant. The system then devises questions using that background data, such as what type of car the person first owned or previous addresses where the claimant resided.

Deputy Labor Commissioner Aaron Fichtner explains, “Identity thieves who steal a person’s name and social security number to file a fraudulent Unemployment Insurance claim are unlikely to know some innocuous, but key facts, such as whether a person graduated a certain college or once owned a motorcycle. They also are unlikely to simply guess the correct answers to three or more questions.”