Identity proofing is proof of whom you are. Proving one’s identity starts with that person answering questions that only they themselves can answer (even if the answers are fictitious), such as their favorite movie, mother’s maiden name or name of their high school. Since most people provide real answers (that can be found online) rather than “Pointy Ear Vulcan Science Academy” as the name of their high school, this technique is on its way to the dogs.
Michael Chertoff, the former chief of the Department of Homeland Security, stated, “I’m going to submit to you that in the 21st Century, the most important asset that we have to protect as individuals and as part of our nation is the control of our identity, who we are, how we identify ourselves, whether other people are permitted to masquerade and pretend to be us, and thereby damage our livelihood, damage our assets, damage our reputation, damage our standing in our community.”
New Jersey suffered one of the biggest unemployment frauds, and to date, has identified over 300,000 people who attempted to fraudulently collect benefits via ID theft, among other improper schemes but also honest errors. However, New Jersey is turning things around.
It’s the only state that’s used identity proofing to fight unemployment benefit fraud, which mandates that job applicants verify a number of personal details through a quiz on New Jersey’s labor department’s website.
The use of billions of public records, collected by LexisNexis, verifies the details, to filter out imposters seeking unemployment benefits. The idea is for honest people to provide answers to questions: information that crooks can’t extract from googling.
This approach has rewarded New Jersey well, with nearly 650 cases of potential ID theft prevented. The state has also saved $65 million since May 2012 after blocking foreign IP addresses from gaining access to its unemployment system. Other states are following suit.
Improper payments (including for jobless benefits) have been occurring for years. Over $176 million in grants, to stop this problem, was issued by Washington in 2013 to 40 states. The errors in unemployment benefits payments on a national level have been about 10 percent for the past 10 years.
Businesses and government frequently must take the brunt of the fraud and waste despite an unemployment insurance system in place.