Imagine if, each month, one in every 10 charges on your credit-card bill was fraudulent. Wouldn’t you be outraged? Wouldn’t you demand an immediate solution from the credit-card company and immediate action from law enforcement?
What if this same level of fraud was occurring on your tax bill? That’s exactly what’s happening. All across the country, and especially in Florida, criminals are using millions of stolen identities to steal public benefits — like unemployment insurance — that you pay for through taxes. We are facing a shocking amount of fraud and the consequences are stark: It harms those whose identities are stolen; robs the social safety net of limited resources; imposes unwarranted costs on taxpayers; and undermines public confidence in government.
Across the nation last year, more than 1 billion records with personally identifying information were breached, and this information is being traded as a criminal commodity on the streets and on the “dark web.” You can find, for example, an ad on the web offering stolen identities for $1.50 each — including full name, date of birth, Social Security number, driver’s license number, home address, bank account number, employer name and more.
Why has the market for stolen IDs exploded? Because, for criminals, a stolen ID is the key to tens of thousands of dollars of ill-gotten profit. For example, one person using one stolen ID to file for unemployment benefits in all 50 states for just one month could steal more than $80,000.
At the Florida Department of Economic Opportunity, we have taken a leading role in fighting fraud. Two years ago, we developed and deployed a state-of-the-art system to detect and stop fraud in the Reemployment Assistance program (unemployment insurance).
The results have been jaw-dropping. Over the past two years, we identified and stopped 135,000 fraudulent claims — about 10 percent of all claims filed. Had full benefits been paid on these claims, $558 million would have been stolen. To put that in perspective, the number eclipses the entire amount of legitimate benefits we’ve paid so far this year.
We’ve made a lot of progress in fighting fraud, and our efforts to ensure the integrity of the program have won DEO the national award for leadership among state workforce agencies. But the fraudulent claims keep coming, showing that there’s more work to do.
That’s why, in this upcoming legislative session, DEO will seek increased funding and legislation to help fight rampant fraud in the Reemployment Assistance program. We are seeking: funding to enhance our fraud-detection system and better protect sensitive data; authorization to hire law-enforcement officers to investigate these crimes; and stiffer penalties for the brazen criminals who commit this fraud. Our efforts are especially important for South Florida, which, unfortunately, has become a national hub for identity theft and related fraud.
Public-benefits systems cannot afford to keep losing vast sums of money to fraud. It is time for government agencies to openly and aggressively confront these issues. We need to enhance data security, but we must also recognize that because there is no such thing as a completely secure system, and because so many data have already been stolen, fraud attempts based on stolen IDs are here to stay. The critical need is to get serious about fighting fraud.
Go back to the original question: If you were getting a tax bill each month to fund criminals, wouldn’t you be outraged and demand action? That’s what’s happening, yet too few people are talking about it, and governments across the nation are doing far too little to fight it. In Florida, we want to remain a national leader in the fight against public-benefits fraud. DEO’s legislative requests will help in that effort. We hope every Floridian will support them.
Jesse Panuccio is the director of the Florida Department of Economic Opportunity.