Proposed law aims to reduce unemployment fraud in Ohio

Mar. 8—COLUMBUS — With Ohio paying out more than $330 million last year in fraudulent unemployment claims during the coronavirus pandemic, two state senators have proposed requiring claimants to prove their identities in person before receiving a penny.

Senate Bill 116 arises as the Ohio Department of Job and Family Services deals with a new deluge of attempted fraud, resulting in tens of thousands of online claim applications being flagged weekly for further review and potentially delaying legitimate claims.

"Millions of dollars in unemployment claims have been paid out to individuals seeking to defraud the state and leaving those who need it most without a lifeline," said state Sen. Bill Reineke (R., Tiffin), who introduced the bill with colleague Bob Hackett (R., Lebanon).

"We must ensure that our limited resources are going to the Ohioans who truly need our support," Mr. Reineke said.

The department has noted that criminal enterprises have used stolen identities obtained from other sources to file unemployment claims through online claims systems across the nation. States like Ohio have scrambled to keep up with the sheer volume of claims during the pandemic at the same time that changes in federal programs required upgrades to their automated systems.

Fraud has been particularly rampant with Pandemic Unemployment Assistance, a federal program serving self-employed, contract, gig, and other workers not eligible for traditional unemployment for whom state systems were not initially set up to handle.

Under the bill, when the department sends out a notice that a claim is valid, the applicant would have to personally visit a local unemployment office before the claim will be paid. The claimant would have to present a driver's license or two documents containing both the applicant's name and address.

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Such a visit would not be required more than once during a benefit year.

The Jobs and Family Services department said it is reviewing the bill.

"ODJFS is actively investigating unemployment claims filed, and we are working closely with the U.S. Department of Labor," spokesman Tom Betti said. "ODJFS has implemented new fraud detection methods and [is] partnering with private-sector experts."

Since mid-January, the department has received more than 182,000 reports of identity theft and fraud, with more than 66,000 of those coming from people who received 1099-G forms indicating that taxable benefits had been fraudulently issued in their names during 2020.

Also, as of Thursday, 9,200 "employers," involving 31,000 records, had reported fraudulent claims.

"We really need to address this as a 21st-century problem, one that can be prevented with technology and not by making people go in person to present their ID," state Sen. Teresa Fedor (D., Toledo) said. "There are ways through technology for someone to show they really are who they say they are."

She, like fellow Senators Reineke and Hackett, is a member of the Unemployment Compensation Modernization and Improvement Council that is looking into the recent problems plaguing the system.

Jeff Ficke, managing director with the financial firm Russell Allen Partners, is part of a team of private-sector experts brought in by Gov. Mike DeWine to help with technological and customer service issues with Ohio's unemployment system.

"With the situation that we find ourselves in with this pandemic and the unprecedented volume increases that we've seen ... we have to actually utilize appropriately technology and big data to help us address some of those issues, and that is an active part of the early plan," he recently told the council.

Those wishing to report fraud may do so by visiting unemployment.ohio.gov, clicking on the red "Report Identity Theft" button, and then following instructions or by calling 833-658-0394.