SOUTHERN COLORADO — Since the end of March, the Colorado Department of Labor and Employment (CDLE) has paid out around $2.5 billion dollars in unemployment benefits. A suspicious uptick in one kind of unemployment benefit is now being actively investigated, after CDLE deemed thousands of claims fraudulent.
The claims being examined are Pandemic Unemployment Assistance (PUA), which is a type of benefit meant for gig workers, people who are self-employed, and independent contractors. CDLE noticed a 77% increase in these kinds of claims submitted during the week of June 7-13, and decided to look into the matter. The cause for the increase could either be a PUA outreach program, or suspected fraud.
CDLE has flagged over 5,000 claims as suspicious of the approximate 18,000 filed that week. Around 2,600 of those were stopped before any payments were made, preventing an estimated $34 million dollars from being paid. The remaining claims being investigated have also had their payment stopped.
Those with CDLE said this is a nationwide scheme that is hitting Colorado. "The regular unemployment system has been around for decades and decades, and it's an established system that has a number of fraud measures in place. This one is just so new, and so unfortunately it just lends itself to being susceptible to fraud," said Cher Haavind of CDLE.
Haavind said the department has now changed their policy on backdating an application. Originally, the claims could be backdated to February, but now it can be no more than one week. Haavind also told News5 the fraudsters are using identities stolen from past breaches and using them to file claims, while also targeting the elderly. She reminded everyone CDLE will never directly reach out to an individual and ask for personal information.
Meanwhile, at Studio 127 in Pueblo, around half of their staff are independent contractors. One of the owners, Terre Heath, said the PUA money ought to be reserved for those who really need it. "Because independent contractors historically have not been able to have the benefit of unemployment. It was what kept us up at night... For the first time in history our industry was covered, and that felt very good... When PUA's became available, we absolutely made sure that everyone knew how to do it and helped everyone through it," said Heath.
CDLE has paid out $277.5 million in PUA's since March 29.