Frustrations rise over 340K frozen jobless claims, Michigan’s lack of answers

Michigan officials say they can’t provide key details about an unemployment fraud investigation that has frozen benefits to 340,000 claimants, including contract details to two firms recently hired to help resolve the situation. (Shutterstock photo)

June 12: 400K unemployment claims now flagged in Michigan fraud investigation

Kyle Meyette is skeptical that Michigan’s investigation into identity fraud among 340,000 jobless claims is honing in on potential criminals. 

The Essexville man considers his own recent history with the agency and wonders why his account is among the 20 percent of claims already approved for benefit payments that have been flagged to “stop payment.”

“If they looked into my claim at all, how in the world could I have possibly filed a fraudulent claim?” asked Meyette. “It seems like they’re blindly reaching in and giving all these people this blanket statement about an international crime ring.”

 

The state, already overwhelmed with 2.2 million unemployment filings since mid-March, stopped payments on the 340,000 claims targeted in a fraud inquiry, as it added another round of identity verification. The system for months has taken heat from laid-off workers and the Legislature for ongoing payment delays. Now workers with legitimate claims caught in the investigation say they’re frustrated about having to navigate more bureaucracy to get their money. They’re also raising concerns about missing notification letters, inability to reach staff and what seems like random checks that disregards internal data.

After 225 phone calls to the state’s Unemployment Insurance Agency on June 1, Meyette said a UIA representative confirmed this week the agency had received his documentation to prove that he’s a legitimate filer. Within three minutes, she released his account. Payments on hold since mid-May arrived in his bank account on Wednesday.

“You shouldn’t have to go through that much red tape to prove you’re not a fraud,” said Meyette, who’d called UIA more than 450 times when he initially filed in March, then waited six weeks for his first payment.

“If I wouldn’t have called in today, how long would I have had to wait for them to notice all of the information that the lady said was in the computer?”

Jeff Donofrio, director of the Michigan Department of Labor and Economic Opportunity (which oversees the UIA), said last week the state has to determine its exposure to international criminal organizations that are targeting many of the nation’s unemployment systems.

Stolen identities from places like Eqifax, eBay and many other sources allow people to set up imposter accounts, pose as workers and obtain illegal benefits. It’s a national problem, Donofrio said, and several states have launched investigations.

However, the state won’t estimate how many of Michigan’s unemployment claims may be receiving fraudulent payments and whether the wide net — with resulting payment delays — is yielding results. 

The state is not releasing details on its investigation to date, and says it is making changes to its computer system. It also has hired at least two outside companies to aid their work. Spokesperson Jason Moon would not identify the firms or how much they are being paid. He said payments involving both direct deposits and debit cards are involved.

Meyette looks at his own history with the UIA and remains incredulous that his account could have been caught up in the investigation. 

He had started a job in the inventory control department of Saganing Eagles Landing Casino in Standish eight days before it had to close due to COVID-19. He applied for unemployment, and it was approved and considered an extension of a claim filed in 2019. That earlier claim was challenged by his former employer, he said, and Meyette’s sworn testimony resulted in a ruling in his favor.

That makes him skeptical that the hunt for potential fraudsters is anything more than random, making him wonder why the state isn’t considering its own files as it halts payments to jobless people who are expecting the money to cover their expenses.

“I feel really bad for people who are in a worse situation that I am,” said Meyette.

Tonya Bosman also went through the stop payment on her claim, and said she is worried about paying her bills. The server at Sinbad’s Restaurant and Marina in Detroit went back to work on Tuesday, after months of unemployment. Her health insurance bill is due, and so is her rent. 

She received a letter in late May from the UIA asking for more information by Tuesday. She sent it immediately, she said, learning later that her account had been frozen at the same time. 

Now she’s waiting for UIA to get to her claim for verification and wondering how long her benefits will be held up. Based on the letter, she thought she had until Tuesday before her payments would be stopped. Instead, she’s stuck in a backlog.

“These things just need to change,” said Bosman, who worries about reduced hours and income as her restaurant job resumes amid requirements for lower dining-room capacity. “We didn’t put ourselves in this situation.”

Michigan legislators want more information from UIA as they continue to receive complaints from residents. State Rep. Matt Hall, R-Marshall, asked UIA Director Steve Gray to appear next week in front of the Joint Select Committee on the COVID-19 Pandemic, which Hall chairs.

“I am concerned over the continued lack of transparency and forthrightness from the department regarding the number of people statewide who are still waiting on payments for their unemployment claims,” Hall wrote to Gray on Tuesday. 

The stop-payments on 340,000 claims add to the undisclosed number of people who still require UIA staff reviews to get through the system. After initial backlogs resulted in a push to add staff,  Gray had said the number of people who had applied but hadn’t been approved was down to 134,000 on May 13, then Donofrio said a week later that the number was 124,000. 

Hall said in his letter that he’s been asking for an updated number, but hasn’t received one. 

Bridge also asked for that information Tuesday but the UIA did not provide an answer. 

“It is clear to the committee that the UIA must develop a smarter plan of action as people have had to wait six weeks or more to receive benefits by no fault of their own,” Hall said.

Eric Lupher, president of the Citizens Research Council of Michigan, said the concerns about unemployment during the pandemic signals a need to evaluate changes in the system.

While some of the issues come from the volume of cases facing the state system, Lupher said, “three months into the … economy shutting down, people are not getting the resources they expect from the unemployment insurance system.

“We certainly want the government to be concerned about fraud and do all they can to prevent it,” Lupher said. “But when they find cases of suspected fraud, the highest priority should be settling whether there’s anything more than a red flag [on a claimant’s file] and helping people get the relief they need.”

Rachael Kohl, a professor at the University of Michigan Law School and director of its Workers’ Rights Clinic,  said UIA’s flagging of jobless claims for fraud has been a problem for years. 

Nearly 50,000 residents were falsely accused of fraud by a faulty computer system between October 2013 and August 2015.The system had been designed to “auto-adjudicate” without human oversight, Kohl said, and ended up being wrong 93 percent of time as it flagged so-called fraud. 

Michigan eventually paid out $21 million in refunds. An ongoing class action lawsuit seeks larger damages from the state for falsely accused residents who had their income taxes or wages seized by the government. 

The imposter claims are different from the previous issue, which centered on people allegedly filing when they knew they were ineligible, Kohl said. But  “given the state’s history with fraud, it makes me nervous,” she said. 

Kohl said that Gray, the UIA director since May 2019, helped to expose the fraud scandal before he worked for the department, making him likely to find a good technology solution to the unemployment computer system’s “over-calibration” to find issues. 

She also said that 2017 reforms to the state’s unemployment system leaves “Michigan much better protected against imposter claims.”

But she remains concerned about some aspects of the investigation. One is the task force set up among the Michigan State Police, the Attorney General’s office and UIA to address the fraud investigation. “There are some reasons to be wary with a task force that doesn’t have any [jobless] claimant on board,” she said.

Some of the claims likely offer easy fixes if they’re needed, she said, such as updating an address. It’s timing that will matter to the jobless people affected. 

“I do want to see that they process the benefits as quickly as possible,” Kohl said of UIA.

The state, which already redirected staff and added workers from other departments to process its surge of claims, now is directing 600 workers to focus on the 340,000 cases caught in the fraud investigation. 

Another 200 will be trained to deal with it this week. At this point, Moon said, 2,000 people are working with claimants at UIA. Normally a dozen people work on fraud in the department, he said. 

So far, Moon said, no estimate is available for when the review will be completed. 

“Verifying the identity of over 300,000 people is obviously a huge task,” Moon said. “Under normal circumstances it would take months, but we will not let that happen here. We will do everything in our power to pay eligible claimants as quickly as we possibly can.”

That timing is ironic to Stephen King, a freelance writer and flea market operator in Naubinway at the top of Lake Michigan in the Upper Peninsula.

King became eligible for unemployment benefits when the federal CARES Act allowed part-time and contract workers to apply. He initially tried after his income dried up in March, but he said it took at least a month for a form for 1099 workers to reach the state website. 

After spending three hours filling it out, King was approved a month later. He received one check with back weeks of pay, he said, before his claim was frozen as part of the investigation. 

He’s having to wait for his identity documents to be approved. Part of the issue is that he hasn’t received the letter with an identification number that he needs to finalize the verification. He also notes that this comes after he received jobless benefits without proving that he had income. Neither a federal 1099 form was required to start the benefits, he said, nor other documentation. 

“They signed me up,” he said. “I thought: This is stupid. I didn’t need any … proof at all.

“You’ve got to be kidding me. You’re going to pay me $760 a week with no income verification whatsoever?”

That system - which King described as “way too easy” - had to be appealing to the unscrupulous, he said. 

In the meantime, he’s waiting for UIA to get to his identity documents, which have been uploaded. He has few bills and said he can survive without his missing payments, which total three weeks so far. 

Like Meyette, he worries for the people who are suffering without receiving their payments. Some, he said, were probably caught up in earlier delays.

The fraud investigation, King said, is coming as a surprise to legitimate claimants whose accounts were frozen. But, he said, the situation shouldn’t have been a surprise to the state.

“I could see this coming,” he said of fraud attempts. “It bugs me that the state didn’t. They should have seen this coming from a mile away.”

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Comments

June W
Wed, 06/10/2020 - 2:30pm

It's understandable to be frustrated when you don't get your government check, but as a fraud victim. I'm more concerned with the state and federal governments stopping the problem, going after the crooks. According to most reports and anecdotal accounts the victims are mostly government workers, teachers, and people who tend to vote for Democrats. It would be interesting to know what is the motive behind these crimes. Is Russia behind this? Are they sowing chaos before the November elections? Are we going to allow this cyber warfare?

BRIAN
Thu, 06/11/2020 - 7:58am

I'm a REPUBLICAN. I lost my job and filed because the Governor vowed in her executive order, "No Michigander should have to struggle to put food on the table." It's been six weeks since my account was frozen and now I'm having to sell my table as I lose my home. Your petty partisan trolling can shove it.

Jesus
Thu, 06/11/2020 - 11:27am

Its comical you whine about partisanship while blaming the governor for a situation created by the pandemic. We have a natural disaster hit that kills over 100,000 and all you can do is be a partisan child and whine about the other side. Amazing the way you conservatives hate the government, yet go into a rage when your free cash doesnt show up. People in the UP are the exact same. Cut our taxes, cut our taxes, cut our taxes the red counties all scream. Where are our services, small towns dont get enough services, we small towns are neglected you also shout like children.
Grow up. Stop being a partisan. Educate yourself. Recognize we had a pandemic hit and that no one knew how bad this new disease was. The governor didnt do anything partisan, she listened to the advice of medical experts. If you were not a partisan in a cult yourself, you would know that.

middle of the mit
Fri, 06/12/2020 - 3:19am

As a northern Michigander I would like to thank you for putting into words that..........I probably could have, somehow have,,,,,,,,,but weren't allowed because I don't have the "temperament" sometimes to deal with them.

A+!

Robert landin
Fri, 06/12/2020 - 9:07am

People like you are the problem, how can you defend any of this? The funds should be released to the people. We have criminal justice system to deal with fraud. Uia stopping peoples payments is unheard of. I cant believe everyone is ok with this. What is wrong with you people?

SJG
Thu, 06/11/2020 - 9:04am

That is right, the democrats running the State are targeting the democrats who vote in the state because... RUSSIA!! June you need an epistemological house cleaning.

Jesus
Thu, 06/11/2020 - 11:28am

Get off this Russia crap. You sound as ignorant, cultish and conspiratorial as the conservatives. Bloomberg spent more money trying to influence the elections then the Russians did and by a factor of several times more. Yet how did that work out? This Russia conspiracy crap is just that, crap.

Jay
Fri, 06/12/2020 - 8:42am

JUNK, June is a clown

Stacey P.
Mon, 06/15/2020 - 7:57am

Your conclusion is laughable and predictable per the media narrative. Everyone that I know affected by this is the exact opposite of the victim you described, which would be more accurate for a targeted freeze. The frustration comes due to the lack of notice that you weren’t getting a paycheck that was expected. And quite frankly, even after multiple verification steps that were to “fix” said fraud issue, the missed weeks have not been paid out. I guess I just chalk that up to “whoops, we’ll get to that eventually. Sorry this has been inconvenient to you...”

WTF!!! No one asked to not be working. Being unable to pay bills is already frustrating. Now, they have yet another issue that was probably simply to slow down cash-flow and buy time. Your partisan BS is offensive to say the least. You obviously have not had to be on the receiving end of any of it.

Covid was to sew chaos and break a booming economy. It’s not Russia playing games, but Pelosi and company. Now riots in the streets to finish what they started. In the meantime, punish hardworking individuals. Please stop watching MSN...

Ronnie
Wed, 06/10/2020 - 2:31pm

This is not just a problem in Michigan.

James
Wed, 06/10/2020 - 4:44pm

Funds stoped first week of may I proved my identity on may 6th funds released may 8th may 26th. Stop payment since the 26th ive logged over 1700 calls with no answer

Anonymous
Wed, 06/10/2020 - 4:57pm

The current system was built to fail by the Snyder administration, much like Florida's. They were responsible for ruining people's credit, causing bankruptcies, and threatening applicants with criminal fraud charges. The system never changed, it's just being administered by different people.

SJG
Thu, 06/11/2020 - 9:27am

So your thesis is; The unemployment system which has been in existence for generations, was dismantled and a new system was built by Rick Snyder's administration for the sole purpose of destroying people's lives. And that was such a laudatory goal that the new administration is continuing the practice. Do you actually think before you write such insanity? Go take a walk, smell the flowers, look around at the beauty that surrounds you. Stop watching news that is causing your delusions.

Anonymous
Thu, 06/11/2020 - 6:42pm

The fraudulent system was instituted by Snyder in 2013 and was called the Michigan Integrated Data Automated System or "MIDAS". It was an appropriatey named system because it gave the state the opportunity to fraudulently cheat applicants out of millions of dollars in unemployment benefits. I think there's still a class action lawsuit pending.

middle of the mit
Fri, 06/12/2020 - 3:37am

SJG,
See....if I despise a program, and I am a Republican, I would defund it. I would take every dollar that I could to drown it a bath tub. Do you want to know how Benghazi happened? Republicans defunded.....not defended the State Department under Hillary Clinton.

It is what you are doing now by defunding environmental and regulational controls over dams in our own State that you WILL find out about.

It is why when Rick Snyder took over a city....you refuse to take responsibility for what went wrong because you ran a city like a business and people got hurt for you "saving taxpayer money".

IT'S TIME FOR PERSONAL RESPONSIBILITY.

You are asking a Governor who has a hostile legislature that won't work with her to fix anything including the roads with NO funding.

Could you name me one Republican that could do that under the same circumstances?

Trump can't get anything done except what Mitch can and that is just pushing corporate judges.

Hope all your kids are CEO's!

Or at least the ones you care about.

Jesus
Thu, 06/11/2020 - 11:30am

Snyder did not do this alone. BOTH sides have for decades designed unemployment systems to be confusing and vindictive. They want to keep the numbers artificially low and add money to the states coffers. Its nothing new and both sides do it, even if Republicans are generally far worse and more mean spirited in the tactics they implement.

Tim W
Wed, 06/10/2020 - 7:49pm

" Part of the issue is that he hasn’t received the letter with an identification number that he needs to finalize the verification" This is what amazes me is they can flag 340,000 people as suspect fraud accounts but they can't get a boiler plate letter out with an ID number to clear up their on going mess. Yet they want credentials uploaded to their data base. If that gets hacked what more of a treasure trove of info could be had.

Mark
Fri, 06/12/2020 - 10:41am

@ Tim thats exactly what concerns me.
The big lie (that is documented ) is that the computer generated list of possible fraudulent claims was then reviewed by a human.

Jamie Halston
Wed, 06/10/2020 - 8:57pm

I think that dude King is lying how it take you three hours to fill out the app and u didn't even have to put income info meaning all u needed was basic info

Anonymous
Thu, 06/11/2020 - 2:49am

So, does anybody know when they'll get this sorted out?

Tim W
Thu, 06/11/2020 - 10:29am

What stymies me is that the state doesn’t seem to be able to get the letters out to people to prove their identities. No excuse for that.

Jim West
Thu, 06/11/2020 - 2:10pm

My mother received a letter at my address in Detroit asking for proof of identity to support her claim. Seems highly unlikely that she ever filed the claim, since she has never lived in Michigan and has been dead for 13 years.

Cody
Thu, 06/11/2020 - 6:21pm

I stole diapers today I haven’t been paid now going on 6 weeks I did all they asked to verify I call 10 times every day with no answer I email everyday with no response . We’re all in this together???? Walmart wasn’t forced to close being a seasonal worker that just missed my whole season is Walmart going to help me ??? Probably not but I will continue to walk in and take what I NEED and I dare someone to try to stop me

Babanadasheep
Fri, 06/12/2020 - 7:07am

...something doesnt add up! My account was on payment hold for 5 weeks, and after searching comments from all the unemployment articles, I noted that only people
Who spent an entire day trying to reach unemployment got results. I called 160 times between 8am and 430pm
No results, finally at 430 i connected via the online chat option. The screen name of my MUIA rep was Gretchen??
Three minutes later I was off hold .
I waited 11 weeks for my first payment due to a voluntary quit last summer, so there were dozens of back and forth emails, letters, w2, 2019 tax returns.. obviously there was NO PLAN to protect the innocent, no respect for INDIVIDUAL RIGHTS,.
THIS IS WHY I AM A REPUBLICAN

Chris
Thu, 06/11/2020 - 10:19pm

I read that Quicken Loans offered to come in and redo and/or help with the mess that unemployment was BEFORE the so-called fraud investigation. Gretchie, in her infinite wisdom that only she knows what she is doing told them no, that the state could handle any problems on their own. In other words...thanks but no thanks.

Chris
Thu, 06/11/2020 - 10:28pm

The UIA has ALWAYS had problems that go way back to when you had to actually stand in line to get your checks. I read recently that Quicken Loans offered to help the state with its computer system or software and to help get things straightened out BEFORE the so-called fraud investigation started. Gretchie told Quicken Loans that the state could figure out how to fix the problems it was having without their help. She basically cut off her nose to spite her face.

Kristina
Fri, 06/12/2020 - 6:51am

As the days go by, I get more frustrated. I make hundreds of calls everyday and I cannot get through to a real person. My unemployment has been , pending payment, for weeks, and now, stop payment. I have been able to get by the past few months with bills getting paid(except for my car payment). I am down to nothing this month. Happy Birthday to me!

Nakia Hicks
Fri, 06/12/2020 - 8:59am

This unemployment stuff is a mess I've been waiting since March it's been 13 weeks. I have not gotten anything yet not my card or money. And i worked this is a dam shame. But everyone that didn't work getting that money. Lord we the people need you now. I'm trying to wait so glad i go back to work next week. Michigan we gotta do better.

Robert landin
Fri, 06/12/2020 - 9:03am

This fraud investigation is total b.s.
Since when does someone elses crime stop another person from getting their benefits.
Every year people defraud the irs, when have they ever stopped all payments? Ebt fraud? Do we stop all payments? Something stinks here, i smell corruption

Mark
Fri, 06/12/2020 - 11:09am

Exactly Robert
Guilty until proven innocent!!!

Anonymous
Fri, 06/12/2020 - 9:45am

I personally think that the state should pay the late fees and any other money damages caused by this problem. After all, if they say that you have to pay back money because you are not entitled to it the unemployed worker pays heavy penalties. Why should the unemployed workers (Due to this stupid virus) have to pay fees and damages for something that is not our fault? This system has been broken for a long time and needs to be scraped. Also, why are they not working 24 hours a day, 7 days a week on this problem?

Upset taxpayer
Fri, 06/12/2020 - 12:52pm

My neighbor has a 26 yr old son who never had a job in his life.. Stays in his room all day playing video games. Never once payed a penny in taxes but yet he is living the good life with his unfrozen unemployment account. I'm 43..been paying taxes since I was 15.. My account is frozen.. My stomach is empty because I have to feed my kid before me.. Gas tank is empty.. And I've been waiting 4 months for my tax return.. Sickening

Conoham
Fri, 06/12/2020 - 1:08pm

This shouldn't be partisan guys. Many citizens on both sides of the aisle are getting screwed out of their benefits. Personally I questions whether the UIA is even experiencing fraud at all, perhaps they're just lining their pockets with our money.

Michael Honeycutt
Fri, 06/12/2020 - 4:27pm

I am deaf and the unemployment tty number is a fraud to collect federal funds. I can not even go to office to fix my claim! I have been contacted twice and they will not follow through to give me access code to verify my identity. Treating me and my wife like identity thieves because of my disability.

Mindy
Fri, 06/12/2020 - 5:56pm

I filed six weeks ago with income proof have worked for years sent them identity verification and still nothing this has become past frustrating if you work for years and it comes up with your job history there should not be a hold up it is bull crap

Steve
Sat, 06/13/2020 - 12:45pm

The letter I received from MIWAM said that they were "unable to verify my identity"

Not sure how that's possible given that they have direct deposit information from my bank which has verified my identity, already have my drivers license number and my social security number and have processed information through the mail to my residence.

That reason is nonsense. My guess is that if anyone's information was shown to be in a possible data breach over the last 2 or 3 years (like equifax) they flagged it willy nilly even if they have more than enough information already. Given that 140,000 of 340,000 flags have been found to be legitimate already, how much does anyone want to guess that the total number of fraud cases will be less than 10,000? And for that we'll stop payment immediately on 340,000 for a period of ....what...a few weeks...? before we verify your identity.

Nonsense and incredibly insensitive to the thousands of people already forced out of work by our government and needing benefits to pay bills. Tone deaf.

Carla
Tue, 06/16/2020 - 6:28pm

I can't believe all the comments listed. I thought that someone would have some insight on what to do about getting your account verified ( done everything the UIA have asked). Instead they are all posts, most absolutely ridiculus, about who's fault it is. Who cares! There are people drowning here! Right or left, what does it matter?

JS
Thu, 06/18/2020 - 9:27pm

Mr. King quoted in the article is correct--the UI system did not collect the information it should have at the time of filing, at least a few months back when I filed.

In his case, he says he didn't have to provide proof of income. I had to upload my 1099, but they didn't ask for a driver's license, Michigan ID number, or any other proof of identity (despite the fact that all the filing instructions I saw said that applicants would need those documents.)

I wondered at the time whether someone flat-out forgot to add that field to the new application form for self-employed people. So I'm annoyed and a little worried, but not particularly surprised, that they've suddenly decided they can't continue to issue me benefits until I've provided this information.

I've uploaded the documents, but I had to use the alternative procedure specified on the UI web site, since (apparently like many others) I haven't yet received the letter they say I'm supposed to have. They didn't e-mail me, either; if I wasn't in the habit of checking my account online frequently, I still wouldn't know there was a problem.

We'll see how long it takes them to decide I'm really me. What a mess! I wish they'd just admit they screwed up and they're scrambling to fix a problem they largely created themselves.