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More fraudulent unemployment debit cards going to people who never applied

Posted at 4:37 AM, Dec 10, 2021
and last updated 2021-12-10 15:35:38-05

It's been an ongoing problem — unemployment debit cards showing up in people's mailboxes when they never applied for benefits in the first place.

Now almost a year later, the Let Joe Know team is finding people are still getting these cards, even when the Arizona Department of Economic Security says they've solved the problem.

"I freaked out and went to work, and said, 'what's going on?'" said Susie.

She thought for a moment she had been fired when a letter from DES showed up in her mailbox asking her to sign to receive unemployment benefits.

After checking she was still employed, she says the very next day she got a DES Debit Card.

It was the same debit card incorrectly sent to thousands of Arizonans last year.

DES says scammers were using someone else's information to apply but adding their bank information. When DES couldn't verify the bank account, debit cards were automatically sent. A process that was supposed to be changed with the implementation of the ID.Me verification process.

But now, almost a year later, Susie says she recently got another card and has still never applied for benefits.

"I wrote 'fraud' all over everything and sent it back to them, cut up the card, sent it back to them. Then this year, I got it again," said Susie.

It also turns out that Susie is not alone in getting a second card.

Brian got one too.

"Soon as I got it, you know, I was like, 'Ah, this is baloney.' I've never filed for unemployment, and I was gonna throw it out," said Brian.

While Susie says she has no idea how much money is linked to her card, Brian was told he had more than $9,000. 

"I was, like, flabbergasted," said Brian. 

We went to DES asking why new cards were issued and when would Susie and Brian hear back about their fraud claims? 

DES says they "elevated" the cases to their team for "immediate review and action." Due to client confidentiality, they are "unable to provide any details." 

They do say if a 1099-G tax form is issued for fraudulent unemployment benefits and you report it, they would be able to "amend or void the 1099-G information and suspend the befit claim associated with the social security number." 

More importantly, they say "you will not need to pay taxes on any benefits issued fraudulently." 

Read the DES statement in full:

Thanks again for reaching out regarding these claimants. We have elevated these cases to our team for immediate review and action. Due to client confidentiality, however, we are unable to provide any details.

The blog entry we released September 30, 2021, details and contextualizes the Department's effort to prevent more than $75 billion in unemployment benefit fraud. It includes a timeline of DES's fraud detection and prevention efforts throughout the pandemic, as well as our aggressive action to investigate allegations of fraud, hold criminals accountable, and recover payments issued on fraudulent claims.

We’ve partnered with more than 100 law enforcement agencies and over 200 financial institutions worldwide. As of September 30, $1.4 billion in fraudulent benefits have been recovered. Over 200 cases have been submitted to the Arizona Attorney General’s Office for prosecution, and more than 100 have resulted in criminal indictments.

DES continues to prioritize unique and complex cases such as this for investigation. We know that behind every one of these cases is an individual or family who is unsettled by being a victim of identity theft and worried about any financial repercussions. We work actively and diligently with the public, as well as our federal and state partners, to safeguard our unemployment programs, prevent fraudulent activity and bring criminals to justice. We appreciate your partnership in highlighting these unique cases for our team’s review.

On September 23, 2021, the State of Arizona transitioned card services from Bank of America to a new Way2Go Card® Prepaid Mastercard® issued by Comerica. If a claim had an active Bank of America card, a Way2Go Card may have been issued to the address on file. An individual who receives child support payments via Electronic Payment Card should also receive a new Way2Go Card.

An individual who receives a card in the mail for unemployment benefits for which they did not apply may be the victim of identity theft, and should file a report with our team here [fraudreferralexternal.azdes.gov]. We also advise that individuals monitor their credit report for any other fraudulent activity that may follow as a result of identity theft.

If the 1099-G contains their Social Security number, but they did not apply for unemployment benefits during calendar year 2020, they may have been the victim of identity theft. DES will review their report, amend or void the 1099-G information, and suspend the benefit claim associated with the Social Security number. If they did not receive a 1099 for unemployment insurance benefits, there is no action to take. If they did not apply for and receive unemployment benefits, they will not need to pay taxes on any benefits issued fraudulently.

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