NJ Staves Off Unemployment Fraud Through Modernization


The New Jersey Department of Labor and Workforce Development (NJLWD) has been able to prevent $4.4 million in unemployment insurance fraud over the past 17 months, through a modernization effort led by the department and built by LexisNexis. The company instituted identity verification efforts that have made it easier for users to sign up, and easier for officials to make sure that those signing up are really eligible.

Approximately 646 instances of attempted identity fraud have been prevented using the LexisNexis suite of Identity Management solutions to verify and authenticate the identities of individuals applying for unemployment insurance benefits through the Labor Department’s website. The process is called identity proofing and it is an important part of a larger anti-fraud program that has saved New Jersey’s Labor Department nearly $450 million since 2011.

Overall, improper payments for unemployment insurance, which includes fraud, waste and abuse, in states cost taxpayers roughly $7.7 billion in 2013, according to the U.S. Department of Labor. New Jersey is the first in the nation to use new identity-based technology to prevent unemployment fraud, resulting from stolen or synthetic identities.

“Users are given a set of identity verification questions similar to what you would be asked when signing up for a new bank account or credit card,” explains Monty Faidley, LexisNexis in an interview with CivSource. “If they fail to answer two out of the three questions correctly, they still have the opportunity to sign up, but its through an in person process that requires documentation.”

As part of the initiative, LexisNexis is responsible for processing requests of unemployment insurance applicants to verify and authenticate the identities of individuals seeking unemployment benefits. The questions are available in a range of languages and customer service people are on hand to help people through the process.

“Identity theft is the fastest growing crime in the U.S., so we have embarked on an aggressive campaign to protect our claimants’ identities and eliminate unemployment fraud,” said Ronald Marino, the department’s Assistant Commissioner of Income Security.

LexisNexis is now working through similar conversations in a handful of states with the New Jersey efforts acting as a proof of concept.