Kansans are getting letters saying they applied for unemployment. The problem? Some never did. – Pittsburg Morning Sun

When Joe Pilsi first got a letter from the Kansas Department of Labor, he figured it was routine.

"I was thinking it was going to be workplace stuff they do every so often, making sure you have your equal opportunity stuff up by the time clock what they always do," Pilsi said. "Thats what I was expecting it to be, which would be instant trash."

But instead, the letter was to confirm Pilsis unemployment benefits claim, something which has happened to scores of Kansans statewide as more residents find themselves out of work due to the COVID-19 pandemic.

The problem is Pilsi, who is the sole full-time employee at the chiropractic firm he runs in Marysville, didnt apply for any such benefits.

A day later, he got another letter addressed to him as an employer about what appeared to be a fraudulent benefits claim.

After repeated calls to KDOL in an effort to ascertain the status of the fake claims, Pilsi said he threw the letter in the trash bin.

"To get into them to ask about it would be virtually impossible and I dont have the time to do it," he said.

Pilsi mentioned it to his wife, who works at the local newspaper, the Marysville Advocate. It turns out the publication had received similarly fraudulent messages, something confirmed by the papers editor, Sarah Kessinger.

Like Pilsi, she flagged the claims for KDOL but has not heard back.

It isnt just in Marysville, however similar stories persist across the state and nation. An Olathe woman said she received more than 70 similar letters, a local television station reported.

In Topeka, family physician Richard Illif reported a similar series of correspondences as Pilsi, with one letter "asking whether I had fired myself or merely let myself go."

Pilsi said the letter was concerning because he had been a victim of identity theft in the past. The fraudulent claim left him to wonder if someone had stolen his personal information again.

"It becomes a royal pain in the butt," Pilsi said.

Most every state has reported similar instances of fraud or attempted fraud, according to Pam Dixon, executive director of the internet security group World Privacy Forum.

Other areas, such as Washington state, have reported an even more sinister type of fraud where third parties will attempt to convince unemployment applicants that they must pay for someone else to file a claim on their behalf.

Such fraud is not common, Dixon said, because it is "high risk and not very profitable."

But with a record surge of unemployment claims in April, a number that has remained high throughout the pandemic, unscrupulous individuals finally had the cover they need to attempt to scam the system.

"Youre able to hide in the numbers," Dixon said. "It is a very effective way of getting lost."

Acting Labor Secretary Ryan Wright echoed this sentiment, saying that fraud has been extremely limited among those seeking regular unemployment benefits but rampant in the Pandemic Unemployment Assistance program providing an extra $600-per-week to applicants.

Wright said that this is because states scrambled to build out the PUA on the fly during the pandemic, while applications simultaneously flooded in.

"This isnt a normal program, this is actually an entirely new unemployment system," Wright said. "Not since 1935 have states had to implement this. In addition to paying out claims, states are having to build out the infrastructure to support hat unemployment program, so that is why were seeing that spike nationally of fraud."

The endeavor was made easier by the July 2017 data breach at credit giant Equifax, something which exposed the names, Social Security numbers and other private information of thousands.

Those who have previously been victims of identity theft are even more likely to have their information used in the unemployment fraud scheme, Dixon said.

And the attempted fraud is continuing, even as the spike in residents applying for benefits starts to decline.

"It is concerning," Dixon said.

The letters have gotten the attention of state lawmakers, who pressed Wright on the matter during a State Finance Council meeting Thursday.

"There is massive concern from businesses in my community," said Senate President Susan Wagle, R-Wichita. "The mailings are highly unusual and there is information that is confidential in there that is going out."

It is especially of concern, legislators said, as the state appears set to embark on a whole new assistance program: the Lost Wages Assistance Program, created by President Donald Trump last month.

The state has indicated it will seek federal approval to participate in that effort, with eligible applicants getting an extra $300-per-week in benefits when it goes live later this fall.

The concern is some of these funds will wind up in the pockets of fraudsters.

"I do think a portion of that [money] is going to get scammed by those organized crime folks," said Senate Majority Leader Jim Denning, R-Overland Park.

Wright and KDOL officials maintain that they are being proactive in reaching out to businesses and that mitigation efforts have been put in place.

The letters do not mean that any of KDOLs data has been compromised, he told lawmakers.

"I can tell you with a high degree of confidence that no state database has been breached," Wright said.

The state is doing better at implementing measures to deter fraudsters, Dixon said.

She pointed to a complex CAPTCHA and other security measures that have been added to the benefits application since she last examined it earlier this summer.

Of equal importance were prominently featured instructions as to what to do in the case you receive what appears to be a fraudulent benefits application. That does not exist in every state, she noted.

In addition to reporting the fraud to KDOL, the agency recommends notifying one of the major credit agencies, as well as banks, credit card companies and the Internal Revenue Service.

As the problem becomes more widespread, many residents are starting to wise up. But Dixon said that for every business owner or worker like Pilsi, who routinely checks their mail and is attentive, there are more who have no idea their information could be compromised.

"A lot of folks are just trying to keep their feet under them and this is a very hard thing to tackle in the middle of a pandemic and in the middle of going back to school," Dixon said. "It is not like people need another thing to handle. Some people are really at the breaking point right now. The thing that really has bothered all of us is it is just such an unkind, ugly fraud. It really directly hurts people."

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Kansans are getting letters saying they applied for unemployment. The problem? Some never did. - Pittsburg Morning Sun

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