Colorado launches fraud review after unemployment claims for the self-employed double in one week
Fewer people filed initial claims for unemployment insurance benefits nationally last week, but in Colorado, the numbers are spiking, primarily in the program that provides benefits to independent workers.
And that has raised red flags with the state.
The Colorado Department of Labor and Employment (CDLE) reported 7,483 regular initial unemployment claims filed the week ending Nov. 7, up from 7,116 the week before, an increase of 5.2%. Nationally, the number of regular unemployment claims fell to 709,000 from 757,000 over the same period, a decline of 8.3%.
Pandemic Unemployment Assistance, a program launched in April to assist independent workers, saw initial claims double in just one week to 7,281 claims from 3,625 claims the prior week. That’s the most PUA claims the state has approved since the week of June 10th.
“Given the large increase in PUA initial claims in recent weeks, CDLE is conducting a review to determine what issues may be contributing to the increase, including a deep-dive fraud analysis,” the department said in its weekly release.
When the new PUA program rolled out in April, the state saw a huge surge of claims, which was expected. But as the economy reopened and workers returned to their jobs and gigs, initial claims fell sharply.
In June, PUA claims started rising sharply in Colorado but fell again after the state implemented several fraud detection measures to thwart claims made under false identities. Those worked for a while, but by late August, PUA claims spiked again, causing the state to delay releasing numbers.
On review, the state found that three out of four of the new PUA claims made in late August, which sought more than $1 billion, were bogus. The CDLE implemented an 18th fraud detection measure, which headed off the bogus claims, which are believed to be coming from organized crime rings operating in the U.S. and abroad, not self-employed workers.
Based on the doubling in PUA claims in just one week, scammers appear to have found a way to avoid the state’s multiple safeguards. The CLDE will provide an update next week on the findings of its fraud investigation. Scammers tend to target those states they perceive as having the weakest protections, security experts say.
Nationally, initial PUA claims fell in 35 states and rose in 15 last week, according to the U.S. Department of Labor. Colorado reported the biggest increase in PUA claims of any state after North Carolina, which reported a weekly gain of 8,169 additional PUA claims.
Colorado has distributed $6 billion in state and federal benefits since March 29, shortly after the pandemic started.
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