Colorado implementing new ID requirement for unemployment; officials hopeful to clear fraud

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DENVER – The Colorado Department of Labor and Employment will partner with ID.me to implement an identification verification system required under the latest federal stimulus package that officials also hope will cut down on the amount of fraud within both the regular and federal unemployment insurance system.

Officials with the CDLE said they hoped to have the partnership in place and up and running in the next week after receiving the final guidance on reprogramming the state’s system for the updated benefits last Friday. Colorado has until Jan. 26 to implement the ID verification requirements under the new federal program.

CDLE Deputy Executive Director Cher Roybal Haavind said that once the ID.me check comes online in the next couple of weeks, all new claimants will have to verify their identity through the program, which is being used in 27 other states.

She and other CDLE officials said they would also be utilizing the new ID requirement to clear people from fraud holds who have legitimate claims being held up by the newly-implemented fraud triggers in the upgraded MyUI+ system.

Haavind said the department will move forward with reprogramming for the federal unemployment programs – PUA, PEUC and FPUC – once the identification requirement is in place and still hopes to be able to restart those programs at the end of the month or in early February, with the FPUC $300 a week for people receiving unemployment benefits likely being the first program in place.

Some people who have been steadily receiving benefits, or who have rightful claims, might also be getting caught up in the fraud triggers and are now not receiving payments for their claims either due to PUA fraud that has been persistent since last summer or the new fraud triggers put in place with the upgrade.

Laura Winsett is one of those people. She said she sent in a selfie and a copy of her driver’s license to prove her claim was not fraudulent but was asked for more documentation, which she says she provided but is still unable to receive her benefits. She said she has about $1,200 on a U.S. Bank ReliaCard she has been unable to access since December because of previous attempts to crack down on fraud.

“I said, ‘Do you want a urine sample?’ What do you want?” Winsett said of the request for more documentation of her identity.

Carol Barbone said she had consistently received benefits since September without issue until the new system upgrade last week and that she too is receiving a message her file is on hold. She said she is worried about paying her bills and that it was “unbelievable” to encounter such a problem at this point in time.

“What are we supposed to do?” she asked.

Haavind and other CDLE officials said Thursday they believed the ID.me and upgraded system would help those cases be cleared quickly.

“Those are the first individuals that will be sent the ID.me process so we can release those holds as quickly as possible,” said CDLE Executive Director Joe Barela.

Once those people have been processed, new claimants will also have to sign up with ID.me, and the CDLE’s Phil Spesshardt said that all claimants would eventually have to confirm their identity through the new system, which utilizes facial recognition to confirm a person’s identity.

Haavind said the CDLE has seen 800,000 PUA fraud holds and 150,000 regular unemployment fraud holds but that all cases would be investigated and that real claimants would have an opportunity to prove their identity.

So far during the pandemic, Colorado has paid out about $10 million in fraudulent benefits, which has been reported to the office of the inspector general, Haavind said. The CDLE said it has stopped about $7 billion in fraudulent payments from going out the door.

The CDLE is also working to revise down past weeks’ initial claims data after finding thousands of fraudulent regular initial claims filed in the weeks since the federal programs expired Dec. 26.

The 41,449 initial claims filed the week ending Jan. 2 were revised down to 25,178. Prior weeks’ numbers were also revised down to 18,121 for the week ending Dec. 19 and 16,660 for the week ending Dec. 26.

CDLE Senior Economist Ryan Gedney said he expected subsequent weeks’ numbers to be revised down in coming weeks as well as the department sorts through fraudulent claims and implements the new identity verification.

The department reported 14,123 regular initial claims were filed last week and said the numbers had already been adjusted to account for fraudulent activity. But Gedney also noted that the filing system was down for most of the week and that numbers from last week could be adjusted in the future.

In total, the state paid out more than $6.9 billion in state and federal benefits to approximately 850,000 people, Gedney said, which is equivalent to the amount of benefits distributed from 2009-2012 during the Great Recession.