IDX CEO Discusses the Recent Spike in California's Unemployment Fraud

Tom Kelly on the recent spike in unemployment claims and California’s Employment Development Department cyber threats and fraud problem

As featured on KFBK Afternoon News with Kitty O’Neal

In California, unemployment claims have reached a record high; more than 10% of claims have proven to be fraudulent, leading to a loss anywhere from $11 billion to as high as $30 billion dollars.

As growing fraud threatens to take California by storm, president and CEO of IDX, Tom Kelly, recently joined Kitty O’Neal at KFBK Afternoon News on-air to unpack the spike in fraudulent unemployment claims and how this is affecting the residents of California.

All told, California has paid more than $114 billion dollars in pandemic relief unemployment payments, and unfortunately, many of these payments may have gone to fraudulent claims and hackers who create synthetic identities. Synthetic identity fraud occurs when personally identifiable information, or PII, such as social security numbers, driver’s license information, and other details, can be purchased or found on the dark web, social media platforms or other sources. By gathering and compiling this information, hackers create these fraudulent identities and are then able to reap money illegally and garner unemployment benefits, exploiting millions of people in the process. The more hacks and breaches occur, the more PII is available for exploitation.

As the Pandemic Unemployment Assistance, established by the CARES Act, was rolled out, many of the main targets of identity theft and fraud have been freelance and self-employed workers, often those who file tax returns with 1099 forms.

California’s spike in fraudulent claims should be a lesson to us all to take charge of our digital privacy. This begins with practicing good digital hygiene, including creating strong passwords, not storing credit card information on unprotected sites, and being aware of privacy settings that may be mining our personal information from us.

Suggested further reading:

1. How to Take Charge of Your Digital Privacy: A Roundup of Resources
2. COVID-19 Brings Rash of Unemployment Fraud
3. Mass Unemployment Is a Field Day for Identity Thieves