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Clearing Your Unemployment System From the Outbreak of Waste, Fraud, and Abuse

Unemployment systems got sick at the start of 2020.

Estimates of waste, fraud, and abuse nationwide range from $87 billion to $400 billion.

Leading service providers to state agencies estimate as much as 50% of the money has been stolen and 70% of the stolen money has left the United States.

So, what can YOU do?

1. Take Preventative Measures With Cross-Checks


Perform routine cross-checks of pre-existing databases to which the state already has access, like new hire records, death records, prison rolls, and the NASWA Integrity Data Hub.


2. Help Diagnose Fraud by Flagging Suspicious Activity


Automatically review cases where many claims have the same IP address, have the same physical address, use the same bank account, and originate in other countries.


3. Prescribe Continuing Treatment with Authentication and Tracking


  • Protect user identities and implement dual factor authentication.
  • Have the unemployment agency track its performance and report back to the legislature each year.
  • Collect improper overpayments when possible.
  • Keep those who commit unemployment fraud from receiving unemployment benefits for five years.


  • An Illinois data breach exposed Social Security numbers and other private information of 32,483 Illinois unemployment applicants.
  • States lack sufficient safeguards on their unemployment systems, enabling fraudsters to bilk taxpayers out of billions of dollars.

There are countless examples of unemployment fraud schemes.

One fraudster used hundreds of stolen identities to file claims in Hawaii, Massachusetts, Montana, New York, Pennsylvania, Washington, and Wyoming—all connected to a single e-mail address.

A Nigerian fraud ring named “Scattered Canary” perpetrated fraud all over the country, stealing as much as $650 million in unemployment benefits from Washington state alone.


Between November 2020 and June 2021, nine states passed significant unemployment program integrity legislation to reduce waste, fraud, and abuse: Louisiana, Alabama, Arizona, Arkansas, Kansas, Kentucky, Montana, Vermont, and West Virginia.


FGA’s unemployment integrity reforms are popular, non-controversial, and have bipartisan support.

At FGA, we don’t just talk about changing policy—we make it happen.

By partnering with FGA through a gift, you can create more policy change that returns America to a country where entrepreneurship thrives, personal responsibility is rewarded, and paychecks replace welfare checks.