DES fraud prevention program is denying innocent persons unemployment insurance

Update to As CARES Act benefits are set to expire, many workers have yet to receive unemployment insurance.

Apparently things are even worse than I knew. The state of Arizona is treating the unemployed like they are criminals. Confusion by first time filers is not a crime, especially when the Department of Economic Security (DES) is responsible for creating this confusion. People need assistance with filing. And getting a live person on the phone for assistance can take hours.

Thousands of Arizonans who are struggling to find work during the pandemic are seeing delays in their unemployment benefits because of amplified fraud-prevention efforts by the state. ‘Are they ever going to pay this out?’: Jobless benefits to thousands slowed by fraud-prevention efforts:

The amount of money Arizona paid out in unemployment benefits decreased for a second consecutive week even though the number of people seeking benefits has gone up, according to data from the Department of Economic Security.

And many Arizonans are growing more unhappy that they are not receiving the benefits that are due to them.

Another 29,000 Arizonans filed first-time claims for unemployment insurance last week, and 184,000 filed initial claims for a benefit called “pandemic unemployment assistance” that is available for contract workers, the self-employed and people with insufficient work histories to collect regular unemployment.

There likely is duplication in those figures from people who apply to both programs or who apply multiple times out of frustration.

Note: Self-employed and gig workers who wanted to apply for the “pandemic unemployment assistance” (PUA) were initially told that they had to file for standard unemployment insurance and be denied before they could apply for the PUA assistance. Early in the program, Arizona did not even have an application process set up to handle the PUA claims. That process has since been cobbled together, but is evolving. It is no wonder the unemployed are confused and having difficulty with navigating this system.

The total number of Arizonans who have been paid one of those benefits since the week of March 14 is now approximately 880,000, according to DES. About 125,000 applications combined from both programs have yet to be reviewed.

DES paid out $41 million less in total benefits last week than the prior week, even though more people are applying for benefits. The weekly total was $722 million. The figure is also lower than the $920 million paid out two weeks ago.

Both regular unemployment and PUA payments declined last week.

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DES officials say many applicants’ benefits are being delayed because of increased fraud-prevention efforts to verify the people getting benefits are legitimate claimants.

“Fraudsters worldwide are using phishing scams, personally identifiable information obtained from previous corporate data breaches and other malicious tactics to collect information from individuals across the country, to file for UI benefits in multiple states,” DES spokesman Brett Bezio said Wednesday.

Further delays are caused by the more than 5,400 unemployment claims and “tens of thousands” of PUA claims that have been flagged as potential fraud, requiring additional attention from DES, Bezio said.

He said DES has “made significant progress” identifying fraud.

“All pending cases require research and validation,” he said. “In many cases, efforts to stop payments and recover funds prevent any losses in benefits.”

The experience of one Phoenix family shows how the weekly benefits can get hung up because of fraud-detection efforts at DES, and result in additional applications getting filed as people try desperately to get financial assistance.

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[But] two weeks ago, she and her husband both had issues filing the weekly PUA claim, and they were not paid benefits, even though they both have several weeks of eligibility left, she said.

Prettyman was able to get someone at DES on the phone, and the agent told her there was no issue he could see with the account, and the problem was likely a two-factor authentication system the agency recently began using to verify the proper people were filing claims and to reduce fraud.

But Prettyman said when she went back online to file a claim, the website instructed her that she needed to file a new initial claim, which she did.

“Now I can’t find my old claims, can’t find my weekly claims from weeks ago that I never got paid from, I have a whole new account,” she said.

Her husband’s account wasn’t paid for three weeks in a row, either, she said, until DES sorted out their issues this week.

She said she understands trying to root out fraud but that DES could do better to help people who need their money.

“They shouldn’t penalize people who are just trying to get by,” she said.

Many other people applying for benefits simply haven’t been paid at all.

Laurie Roberts of The Arizona Republic has some good advice for our criminally negligent governor before the economy goes off the cliff later this month. Lots of disasters headed Arizona’s way. Gov. Doug Ducey, are you seeing this? (excerpt):

5 things the governor must do this week

Speaking of leadership, here are a few things that should be at the top of Ducey’s to-do list this week.

1.   Fix Unemployment Fiasco No. 1.  Specifically, the one that occurred over the weekend, when an undisclosed number of Arizonans discovered their Bank of America accounts had been emptied. It seems their unemployment pay, deposited into a debit card account, simply vanished. Arizona closes unemployment accounts in anti-fraud effort, but some say legitimate funds were wiped out.

The state Department of Economic Security says that most of the accounts shut down were fraudulent and that it is is investigating the ones that weren’t. This should reassure absolutely no one. Why, you ask? Read on.

2.   Fix Unemployment Fiasco No. 2. Fully 125,000 Arizonans are still waiting for unemployment checks. And while some other states have call centers where people can get answers, in Arizona it can take a miracle to get a real person on the phone.

It’s a heck of a way to run government like a business. Ducey needs to find out what DES needs to immediately speed up processing these claims and then set a deadline for getting it done.

It also wouldn’t hurt if he brought his DES director to one of his press conferences to answer questions about why our state can’t seem to get it right when so many others states are managing to get the job done.

3.   Fix Unemployment Fiasco No. 3. When the Federal Pandemic Unemployment Compensation program ends on July 25, Arizonans who are out of work will lose those $600 weekly unemployment checks. Instead, they’ll be living on $240 a week in state unemployment pay, assuming they even qualify for the full benefit. Or at all.

It’s an economic disaster in the making, not just for the people who will be wondering how to pay the rent but for the state’s economy that has been propped up by the federal unemployment pay program.

Ducey needs to call the Arizona Legislature back to the Capitol to boost state unemployment pay in the event Congress fails to act to extend the federal program. He also needs to raise the earnings exemption (right now it’s $30), so that people who are working reduced hours can collect at last some unemployment pay to help keep them afloat.

Don’t wait for disaster to hit. The state hasn’t raised its unemployment pay since 2004. If you want to know what that feels like, just wait until July 26 when hundreds of thousands of Arizonans must somehow survive on the equivalent of $6 an hour until they can safely return to work.

You have just 12 days, Gov. Ducey.

4.   Go to bat for people about to be put out on the streets. Thousands of struggling families Arizona families face homelessness when Ducey’s 120-day moratorium on evictions ends on July 22. Some have lost jobs. Some have lost the ability to work either because they or a family member have COVID-19 or they have children who can’t go to school or daycare. The problem isn’t likely to improve when those $600-a-week federal unemployment paychecks disappear.

Meanwhile, the state’s COVID-19 rental assistance program is so backed up that it’s a joke.

The Arizona Republic’s Rebekah Sanders reports the state has gotten aid to fewer than 1,200 of the the nearly 18,000 tenants who have applied for help from the Rental Eviction Prevention Assistance Fund. Nearly 80% of funding, roughly $3.9 million, is just sitting there, along with a mountain of applications dating to April.

Either get that money where it needs to go or extend the moratorium on evictions. Or even better, do both.

5.   Get the public schools what they need. Ducey is under a lot of pressure to reopen schools next month, from a president who is desperate to get the economy up and running before November. He’s also under a lot of pressure not to reopen schools next month, from parents and teachers who have no interest in turning our kids into coal mine canaries.

Unlike masks, this is one area in which Ducey should punt.

Let each school district decide how to best handle the education of its students.

I suspect most will opt for remote learning. But there are some parents who will want to send their children to school, either because they don’t want them to fall farther behind.

Some districts in cooler climates may want to reopen next month and hold classes outside. Some here in the blast furnace that is Phoenix may want to delay opening until September or October. Many will, no doubt, offer a combination of choices.

So here’s what Ducey and Superintendent Kathy Hoffman should do:

Let each school district figure out what is best for its community, then make sure that those districts are fully supported and fully funded, however they approach the coming school year.

And tell President Trump, next time he calls, to lay off the threats for cutting off federal funding for schools that don’t jump to do his bidding.

I don’t envy Ducey. The guy has become an overnight sensation of sorts, the nation’s poster governor for how to botch the handling of a global pandemic.

In recent weeks, he has demonstrated more and more that he’s just not up to leading us out of this corona crisis. Just not up to making the hard choices when really there are no good choices.

This week, however, he has another chance to prove me wrong.

Sadly, Governor Ducey and the people he has surrounded himself with will never fail to disappoint. It’s all going to hell after July 22.