The unemployment rate in the US increased because of the Coronavirus pandemic, and more people needed unemployment benefits to compensate them for significant income losses. Therefore, the CARES Act, or the Coronavirus Aid, Relief, and Economic Security Act, was enacted to give eligible people unemployment benefits.
State agencies saw a surge in unemployment benefits enrollment as a result of the CARES Act’s enactment. Unfortunately, many of those who enrolled were fraudsters, and state agencies lost around 36 billion dollars to fraudulent stimulus claims. The Federal Trade Commission noted 319,423 complaints regarding the COVID-19 stimulus, with 54% about fraud and 15% about identity theft.
The large number of identity frauds revealed vulnerabilities in the government’s fraud prevention efforts. It prompted Congress to include new provisions for the second rollout of the second COVID-19 stimulus package. The provisions state that the agencies must verify the identity of the eligible applicants to combat grifters.
The provisions, however, do not state how agencies must verify identities, so it is up to the agency to decide how they will comply with the new requirements. Using biometric identification and device-based authentication technologies can help agencies comply with the requirements and ensure that fraudsters will not get stimulus checks.
State agencies must invest in FIDO authentication technologies and switch over from their old knowledge-based authentication systems. Fast Identity Online solutions allow agencies to verify the applicants’ identities without relying on their social security number, birth date, tax filing status, and other easily compromisable information. Hackers can easily access such information and use it for identity fraud.
It is also available to use automated systems to confirm an applicant’s eligibility and detect potentially fraudulent activities. Leveraging automated systems allows government agencies to expedite the verification process while weeding out any grifters.
For more information on stopping identify fraud, see this infographic by authID.
