SACRAMENTO, Calif. — The Employment Development Department (EDD) has confirmed about $11 billion of the payments it made during the coronavirus pandemic are fraudulent and said that number might be as high as $30 billion.
Not only are people who are waiting for their benefits impacted but Congressman Tom McClintock has said EDD fraud could cost California taxpayers thousands of dollars per family.
In hopes of stopping fraud over the past several months, EDD froze more than a million accounts due to fraud concerns. However, it left many actual people eligible for those benefits impacted.
ABC10 spoke to the CEO of ID.me, Blake Hall, on the fraud. ID.me is one of the tools EDD started using last fall to help verify people’s identity.
“They prey on the elderly people, young people looking for a job, and they’re convincing the owner of that identity to take steps to take control of their information. Once they find an approach or a process that works for a state they literally create a PDF of step-by-step instructions and they post it,” Hall said.
The ID.me system has seen fraudsters try to get unemployment benefits from many international places including Nigeria, Sri Lanka, Bulgaria, and Russia.
One of the ways the fraudsters try to file is by using personal data from the dark web. Social security numbers, birthdates, and names are out there because of company breaches like Equifax. That data breach exposed 147 million people.
However, one way of fraud is what Hall considers the most dangerous and it’s called social engineering.
“That’s where the actual owner of the identity is in the loop but they’re being tricked by the attacker who is convincing them that they’re sharing their information to win prize money or to get a job,” Hall said. “There are all these scams on Instagram, Twitter, Facebook where they’ll say verify your identity with ID.me and we’ll give you a thousand dollars through Cash App no questions asked.
According to Hall, at the end of January ID.me was able to stop about 900,000 fraudulent claims nationally.
Hall says scammers are taking advantage of opportunities.
“No legitimate business will ever ask you for your password or login credentials over social media or through any app,” Hall said. “They will never ask for your government identity documents. Interact with the business through their official website and product and if you have a question contact them through their listed customer support channels and follow the instructions.”