NJ for the Win

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States nationwide are making attempts to bring a stop to the countless fraud scams that run through the veins of the government. Whether criminals are targeting food stamps or Social Security programs, the ability to ”track and crack” cases is often difficult, without appropriate methods and software for such activities. Today’s Fraud of the Day from CBS.com highlights a new system implemented by the state of New Jersey to stop unemployment fraud.

The article reports that New Jersey has implemented an ”identity proofing” program to catch individuals who try to fraudulently collect unemployment compensation. The concept is simple? leverage a systematic set of questions that a person is supposed to answer about oneself, such as? ”Where did you graduate high school?’? ”Do you own a motorcycle?’? ”What was your first job?’? The intent is for the actual individual to answer those personal questions correctly, making it hard for someone stealing an identity to know the appropriate answers. A Department of Labor official explained that in many circumstances, the fraudster obtains a person’s identity but knows nothing about that individual. This type of system makes it difficult for a fraudster with zero knowledge of the victim to successfully answer more than three questions right. (While it may seem like an inconvenience to have to sit down and answer questions and remember your answers, in the long run it helps to protect your identity from getting caught up in a fraudster’s scheme to defraud the government.)

The anti-fraud efforts have resulted in saving around $153 million in New Jersey over the past 18 months. Officials explain that the Labor Department staff is not informed of the questions posed to applicants, or how the applicants respond. In addition, the system itself does not store, retain or share any of the background data it calls up when verifying an identity; instead, the system places a ”pass” or ”fail” designation on the account. If a person does not pass the identification test, or if they decline to participate, they must prove their identity in person. (Finally – we are putting faces to names!)

States are beginning to take action in the fight against fraud. Although bringing a stop to all fraud nationwide is a massive task, the steps states take help in the nationwide fight. To play on cliché sayings, I will declare this, ”New Jersey for the win.”

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”NJ Moves to Combat Unemployment Benefit Fraud,” published by CBS.com on October 9, 2012.

TRENTON, N.J. — New Jersey state labor officials have taken another step to combat the theft of unemployment benefits.

Labor Commissioner Harold Wirths said Tuesday an “identity proofing” system recently went online that requires applicants to correctly answer multiple choice questions about themselves before payments are approved. The system is meant to stop identity thieves from filing phony claims.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.