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Surge in Colorado unemployment fraud affects legitimate claims

CDLE reports more than 22,000 claims on hold since April 1
unemployment
Posted at 6:25 AM, Jul 25, 2023

DENVER — A surge in unemployment fraud is affecting legitimate claims, but the Colorado Department of Labor and Unemployment (CDLE) says they are working to address the issue.

Lorie Junnila is just one of thousands of Coloradans affected by the issue. She lost her job in March and immediately tried to apply for her unemployment benefits, but she said she was locked out of the system due an issue with her identification.

Then, she remembered getting a US Bank Reliacard in the mail a couple of years ago when she was still working. She reported it, but it turns out doing the right thing caused her more headaches down the road. Today, Junnila believes that is why her account had a fraud hold that proved impossible for her to get lifted, so far.

"This has just gone on and on and on," Junnila said. "So I was at my wit's end, I reached out [to Contact Denver7] and you were the one that kind of got the ball rolling as far as cleaning up the ID. So thank you so much for that."

It turns out Junnila is not alone, as a surge in unemployment fraud is affecting thousands of legitimate claims, and the Colorado Department of Labor and Employment is working to address the issue.

"After a year-long lull in fraudsters attacking our system with fraudulent claims, the department saw a significant jump in fraudulent activity starting at the end of March/beginning of April," said Philip Spresshardt, the director of the Unemployment Insurance division, in a statement to Contact Denver7. "This was identified using our fraud detection tools and looking at the sheer volume of incoming claims with no corresponding economic activity to necessitate those high numbers."

Because of the increase in claims, the department moved all of its fraud detection tools to the highest possible level.

"While this did stop a massive amount of fraudulent payments from being issued, it also caught up legitimate claims and made accessing benefits more difficult for those without access to adequate technology," Spesshard added.

Spesshardt said that the department has been working over the past six weeks to identify those legitimate claims and recently released those of low risk for fraud.

Since April 1, the department has seen 62,000 initial claims. Of those, 22,000 currently have fraud holds in place, 5,766 of which are active claims.

CDLE believes the legitimate claimants that are being held up are part of the 5,766, as all other claims were abandoned after fraud holds were put in place indicating a high likelihood of confirmed fraud.

Junnila said her ID issue was cleared, but the delay caused her to miss other deadlines, so she is still working through the process to get her back payments.

"We've had to maybe pick and choose some of the bills we pay; and groceries, we buy just what we need," Junnila said, adding that her family's savings is depleted, and she's still looking for work. "I've had a few interviews, and I think when they see how old I am, they change their minds. So it's really tough. It's been really tough."