Unemployment insurance fraud is big business – if it’s successful. The State of New Jersey is winning the battle against unemployment insurance fraudsters thanks to new technology. According to an article posted on NJ.com, there are between 1,600 to 2,000 attempts to bilk the system each week. But, with the new technology (Full disclosure: my company, LexisNexis, provides some of the technology), state authorities are now better able to track down creative perpetrators who have applied for benefits for which they do not qualify, nor deserve.

When applying for unemployment benefits, a person must certify that they are able and actively seeking work. (That means you can’t have another job while collecting unemployment benefits.)

The story states that a Bergen County couple, who applied for unemployment benefits while on a cruise to the Bahamas, logged on to the Department of Labor website from their ocean liner. What the couple didn’t consider is that the computer they used had a unique internet protocol (IP) address that showed its precise location. (You can probably guess that they were not cruising in New Jersey. Oops – busted!)

In fact, the state has put in place a host of anti-fraud measures that have saved New Jersey nearly $449 million over the past three years. Thanks to the use of “identity proofing,” the state has been able to screen applicants by matching answers to background questions with public records. They also started cross-checking claims against the National Directory of New Hires to determine if those who had returned to work were still collecting benefits after starting a new job. The state also has begun to check unemployment claims against incarcerated individuals across the state’s county jails to avoid making undeserved payments.

Unemployment fraud is not just a New Jersey problem, but one that affects the entire nation. It is estimated that two to three percent of all unemployment claims may be fraudulent. Because many applications are completed online, unemployment office personnel are not personally meeting with applicants or grilling them about their efforts to find a job. That’s why the identity proofing technology is so important. Kudos to New Jersey for the great strides it has made in preventing abuse to the system that is meant to help those who truly deserve the benefits to get back on their feet and into a new job.

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