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PSU, Kansas see rise in unemployment fraud amid pandemic

Since the beginning of the COVID-19 pandemic, the state of Kansas has seen an increase in the number of fraudulent unemployment claims, 100 cases for employees at PSU alone. 

According to a memo sent out by Acting Kan. Secretary of Labor Ryan C. Wright, the Kansas Department of Labor has stopped approximately 100,000 cases of unemployment fraud related specifically to identity theft. These claims concern criminals posing as people to file unemployment claims and not those who file unemployment claims while not meeting the criteria. PSU has discovered 70 claims since May 20, 2020 filed in the names of PSU employees. 

“Our state finds itself in challenging times as we respond to COVID-19 and deal with its subsequent impact on our families, friends, and communities,” Wright said. “Unfortunately, Kansas has joined every other state that is seeing an historic increase in reports of fraudulent unemployment claims due to identity theft, and it may directly affect you.” 

These fraudulent claims are mostly filed used the personal information of those who have not even lost their jobs, and many don’t even realize that their identities have been stolen until they receive communication from the Kansas Department of Labor. 

“How big is this issue?.,” Wright said. “Nationally, the U.S. Department of Labor’s Office of Inspector General estimates that this type of fraud has already cost taxpayers $8 billion to date, but this could ultimately climb as high as $26 billion… For public employees it is especially problematic because so much of our information is often more accessible to the public than our peers in the private sector.” 

Other levels of the Department of Labor have also been made aware and according to the Kansas Information Security Office, these fraudulent unemployment claims are affecting individuals in all sectors of government. 

“In many cases, employees in these areas have not suffered from furloughs or layoffs,” a memo from the Office said. “Malicious actors are exploiting these individuals’ information because they know that they are less likely to collide with legitimate unemployment claims by filing against people in these sectors (healthcare, education, higher education, and first responders).” 

The memo also said that the theft of employees’ information most likely happened from previous breaches of cybersecurity. 

“There have been multiple reports from various states that indicate the malicious actors are likely using individuals’ information obtained from previous private sector breaches,” the memo said. “The bad actors then hang onto the information to use it in times like now. In May, (there were) similar issues in at least 12 states… In addition, (it) is believed that the malicious actors are then matching information with public databases on public employees to target their fraudulent unemployment insurance filings. By targeting these individuals, they increase their chances of slipping through and receiving a fraudulent pay out.” 

Although this is a rising issue, PSU director of human resources Lori Scott Dreiling said that no student employees have seen fraudulent claims filed against them. 

“We’ve seen this affect employees in a seemingly random way,” Dreiling said. “We’ve had administrators, maintenance, faculty, all the way down. Interestingly, we haven’t had any student employee claims. It’s been for full-time, benefits-eligible employees…” 

She also said the breach in security was not from defects in cybersecurity in Pittsburg State’s infrastructure or the state of Kansas’ but most likely from the breach of credit company Equifax in 2017. 

“Unfortunately, there aren’t many ways to be proactive against this because it’s not really proactive, it’s reactive,” Dreiling said. “What employees can do is check your credit report for any unusual activity. You have that right by law to be able to check your credit report for free. Do that and make sure it is secure…” 

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