Pennsylvania is suspending payments for new claims to the Pandemic Unemployment Assistance program, known by its acronym PUA, while the state deals with a spike in suspected fraudulent claims.
PUA was created through the federal CARES Act and is easier to apply for than other forms of unemployment benefits. As a result, it has extended benefits to millions of non-traditional workers, such as temps and gig workers, but it’s also been the target of fraud nationwide, with scammers often using the stolen identities of real people to apply.
On Thursday and Friday of last week, applications to Pennsylvania PUA rose dramatically and were mostly from out-of-state, both red flags, said Secretary of Labor and Industry Jerry Oleksiak during a briefing on Monday. New applications had settled to around 5,000 per day, but on those days they suddenly spiked to around 20,000 per day.
“This is a national issue, it is not just a Pennsylvania issue. We are learning from other states what we need to do to combat this, and we’re hoping the new steps we’re taking can put an end to it,” he said.
The department was vague on those new steps, but the first is postponing payments to anyone who applied during those spikes or after. Second, new steps for verifying an applicant’s identity are being imposed, although state officials would not spell out what they are for fear of tipping off future fraudsters. People already enrolled in the program should not experience a disruption in payments.
Officials also hedged on how long it would take to create these safeguards, but said they worked through the weekend to get a jump on the fix.
“We will do it as quickly and as effectively as possible. We understand the lifeline that PUA is for so many of our fellow citizens,” said Oleksiak.
Fraud has become such a widespread problem with the program that earlier this month, the U.S. Department of Labor announced it was giving the states $100 million to root out fraud in emergency COVID-relief programs, primarily PUA and another federal unemployment program called PEUC, Pandemic Emergency Unemployment Compensation. Of that total, Pennsylvania received $2.43 million.
In most cases, state officials have said little about who could be committing the fraud, citing ongoing investigations. They will say that much seems to be a coordinated criminal effort using information harvested from data breaches in the past. No new information is believed to have been stolen from Pennsylvania itself.
In August, U.S. Attorney in Pittsburgh Scott Brady and Attorney General Josh Shapiro charged 33 people with knowingly filing false unemployment claims, some of whom are currently incarcerated at state prisons and jails.
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