Criminals have continued to pose a challenge for many honest people as the criminals found new ways to commit fraud and identity theft. One way that criminals have caused problems is by enrolling for unemployment benefits under the CARES ACT or Coronavirus Aid, Relief, and Economic Security Act. Hackers and fraudsters stole many people’s identities, and they were no longer eligible for unemployment benefits.
State agencies lost about 36 billion dollars to fraudulent unemployment claims, and the Federal Trade Commission noted that there were 319,423 complaints as of January 2021 regarding the COVID-19 stimulus package. Additionally, 54% of the reports were about fraud, while 15% were about identity theft.
Congress started adding provisions to lessen the risk of fraudsters taking advantage of the CARES Act’s second stimulus package. Under the new Consolidated Appropriations Act of 2021’s Section 242, the state agencies are mandated to verify the applicant’s identity.
Among the solutions that agencies can use are device-based authentication and biometric identification solutions. However, using such solutions requires agencies to switch from legacy knowledge-based authentication solutions. The older equipment that most agencies are using is slow, prone to human error, and generally non-compliant to newer regulations.
Using FIDO2 authentication solutions allows state agencies to confirm whether the applicants are eligible or not without relying on information like their social security number, birth date, tax filing status, and address. Such information can easily be compromised and accessed by hackers and used for identity theft. If agencies do not invest in modern solutions, they will only invite fraudsters to continue their illegal activities.
It is also necessary to use modern data analytics to use their advanced algorithms to streamline the detection, interpretation, and communication of data patterns. Data analytics can help agencies detect potentially fraudulent activities and prevent criminal attacks efficiently.
For more information about stopping identity fraud, see this infographic by authID.ai
