Earlier this month, Lad Drago received an email notification from the Alabama Department of Labor saying someone had filed an unemployment insurance claim against his Spanish Fort insurance agency.
He went to the state’s online system for more information.
“Lo and behold, Lad Drago was the claimant, and they had my Social Security number, as well as my date of birth,” Drago said.
This began hours of trying to get more information about the fraudulent claim, including telling a Department of Labor representative it was a fake.
He was pointed to a claims dispute webpage.
“That’s where everything really started getting frustrating,” Drago said. He said he tried multiple ways to convey to Labor that payments shouldn’t be made to the bank account set up to collect the money. He said there’s an out-of-state phone number attached to the claim and a strange email address.
On Monday, he received a notice of payment on the claim.
“It looks like they approved the unemployment benefits and are going to start paying this person $238 every week,” he said.
He’s now concerned his business' experience rating, which determines how much employers have to pay into the state’s unemployment insurance fund, will go up. He’ll now work to get that corrected.
Labor says fraud cases are up since the COVID-19 pandemic began. The department has received about 25,000 to 30,000 fraud reports since opening a reporting portal in July, spokeswoman Tara Hutchison said. But that doesn’t mean all those reports will be determined to be fraud, she said.
“(The department) is doing all it can and is constantly working to develop new and innovative ways to detect fraud and prevent it from happening,” Hutchison said.
“We are working with state and federal law enforcement agencies to investigate these cases and will prosecute,” Hutchison said.
A bill pending in the Alabama House would put into law some existing and new unemployment fraud detection practices at Labor.
Sen. Arthur Orr’s Senate Bill 373 cleared the Senate early this month on a 19-0 vote and is awaiting a House vote.
“Our state Department of Labor is certainly doing all they can, but the bill would memorialize in the code some of these requirements as far as checking people for their eligibility or lack thereof,” Orr, R-Decatur said.
Orr pointed to California, where officials have estimated billions of dollars in unemployment fraud.
Some of the requirements in the bill include weekly checks of the Alabama Department of Corrections’ rolls to ensure inmates aren’t receiving benefits and using a National Association of State Workforce Agencies platform designed to compare and analyze claims data for enhanced fraud detection and improper payments.
Hutchison said that many of the requirements in the bill are already in practice at the department.
Orr said business owners he talks to have an extreme shortage of applicants for available jobs.
“The federal government through its incentives to unemployed people have facilitated the incentive for some people who don’t want to work to get paid not to work,” Orr said. “Having an anti-fraud bill would certainly help make sure that only those who are truly eligible are receiving benefits.”
Dev Wakeley, a policy analyst for the nonprofit advocacy organization Alabama Arise, said that while stolen-identify fraud cases may be happening, they could be originating out of state and are unrelated to thousands of Alabamians who earned their benefits, many of whom waited months to receive them. Unemployment is a system for people who qualify for it through their time on a job, he said.
“If your view on people on unemployment is that they’re trying to get one over on the system, then your thoughts are already mistaken,” Wakeley said. “The idea that people are trying to take advantage of the generous $275 benefits in the state of Alabama is just absurd."