Thanks to the COVID-19 pandemic, many people lost their jobs and had to rely on government aid to get by. As a result, the CARES Act, or the Coronavirus Aid, Relief, and Economic Security Act, was enacted on March 27, 2020, to provide unemployment benefits to eligible people.
The enactment of the CARES Act resulted in a surge of unemployment benefits enrollment, including many fraudsters. Many state agencies lost about 36 billion dollars collectively to fraudulent unemployment claims. The Federal Trade Commission also noted that 319,423 COVID-19 stimulus complaints were made as of January 2021, and 54% of the reports were comprised of fraud, while 15% were identity theft.
Because of the large number of fraudulent activities done to take advantage of the CARES Act, Congress added provisions to mitigate the risk of swindlers taking advantage of the second stimulus package. Under Section 242 of the new Consolidated Appropriations Act of 2021, the state agencies are mandated to verify the identity of the eligible applicants for the government’s pandemic unemployment assistance.
State agencies can use biometric identification and device-based authentication solutions to comply with the Consolidated Appropriations Act of 2021. However, using such solutions requires agencies to switch their legacy knowledge-based authentication or KBA systems and invest in modern FIDO2 authentication solutions.
Using FIDO authentication solutions allows agencies to confirm who their applicants are without relying on easily compromisable information like social security number, date of birth, tax filing status, and address. Such personal information can easily be accessed by hackers and used for identity theft.
Agencies can also use automated systems to confirm a claimant’s eligibility for the stimulus package and data analytics to detect any potentially fraudulent activities.Leveraging automated authentication systems can expedite the eligibility authentication process and result in a faster decision-making process for application approval.
To know more about stopping identity fraud for unemployment assistance benefits, see this infographic by authID.ai
