State offers free credit monitoring for PA unemployment recipients due to fraud

HARRISBURG, Pa. — (This report has been updated to reflect new information as of 7 p.m. 1/24/22)

The state is taking the major step of offering free credit-monitoring to unemployment recipients in Pennsylvania because of ongoing problems with fraud.

While the Department of Labor and Industry would not confirm the date of any breach, a spokesperson told 11 Investigates, “All UC claimants with active accounts since June of 2021 will be offered the protection.”

June is a significant timeframe because that’s when the department underwent a massive $35-million overhaul of the Pennsylvania Unemployment Compensation system.

The action comes after weeks of reporting by 11 Investigates into a possible mass breach of system. The state still would not say how many people have been impacted.

“Our ongoing investigation will determine the number of accounts potentially affected by these unusual account changes perpetrated by fraudsters,” Department of Labor and Industry spokesperson Alex Peterson said in an email to 11 Investigates.

L & I called the free credit-monitoring a “precautionary step” as it continues to investigate a possible breach of the system and says no breach has been confirmed.

“While an investigation into the cause of disruptions within accounts is ongoing, we want to protect Pennsylvanians from further harm by proactively providing free credit monitoring. We remain committed to working with law enforcement to prevent criminals from stealing public money and to catch those behind it,” Department of Labor & Industry Secretary Jennifer Berrier said in the news release.

11 Investigates interview leads to credit-monitoring

In the news release, L & I pointed to an exclusive interview 11 Investigates did with the U.S. Attorney for the Western District of Pennsylvania in its reasoning for finally taking action to offer credit-monitoring.

Assistant U.S. Attorney Cindy Chung commended 11 Investigates for providing a public service by warning unemployment recipients about fraud impacting the system.

“It’s really a service. So, people can be on the look-out for it, and so people can play defense against it in the future,” Chung said.

Chung told 11 Investigates unemployment fraud is a big issue and one that is evolving from bad actors opening fake accounts to more sophisticated attacks.

“In the beginning, you saw a lot of things where people were trying to defraud the government,” Chung told Channel 11. “The type you recently covered is a different type, where hackers actually illegally access the system, such as the Department of Labor, and then steal account information directly.”

The state cited that interview in its news release today, saying, “Last week, the U.S. Attorney for the Western District of Pennsylvania publicly confirmed the existence of an FBI and Homeland Security investigation into what appears to be a highly sophisticated, coordinated effort to infiltrate various government systems.”

The L & I news release went on to say, “While L&I and the Office of Administration previously were requested to keep the matter confidential, given this recent public disclosure, the departments can now confirm that they have been coordinating with relevant federal partners on the investigation.”

Lack of action

11 Investigates first reported about a possible mass breach to the PA Unemployment Compensation system nearly a month ago, with dozens of additional unemployment recipients coming forward since to describe similar account hacks.

“I wouldn’t have known what was going on with my account if it wasn’t for your story,” unemployment recipient Pete Smock told us earlier this month.

11 Investigates learned many potential fraud victims were never notified by the state that their personal information might have been compromised. Several expressed frustration with the state and called the lack of notification irresponsible.

In previous exchanges with 11 Investigates, the department used the existence of an ongoing investigation as an excuse not to notify some unemployment recipients that their accounts might have been breached.

“The Department of Labor & Industry (L&I) has detected an escalation in fraudsters’ attempts to steal unemployment compensation benefits through increasingly aggressive and sophisticated schemes. In collaboration with the appropriate partners, we are actively gathering information to better understand this escalation in fraudulent activity and planning to implement additional security features in the near future,” a spokesperson wrote to channel 11, two weeks ago.Details on when exactly unemployment recipients can get the credit-monitoring are not yet clear. Friday, L & I announced claimants would be able to get the credit monitoring “in the near future.” On Monday, they provided this update to 11 Investigates.

“We are working to finalize our credit monitoring contract now. Affected claimants will be notified directly about how they can register for the free credit monitoring service,” Peterson said.

L & I pledged also pledged more than two weeks ago that it would add multi-factor authentication for unemployment recipients to access their accounts as an added layer of protection. There is still no word from the state on exactly when that will happen.

“We anticipate having more information to share about this project in the coming weeks,” L & I said.

Report suspected fraud

Online:

• Individuals can report suspected unemployment fraud by visiting the UC Benefits Website and clicking “Report Fraud” at the bottom of the page to complete and submit the Identity Theft Form. Do not log in.
• Employers should indicate the claim is fraudulent in their response to the Notice of Claim Filed.
• To report identity theft fraud related to the federal Pandemic Unemployment Assistance (PUA) program, please click here.

To report fraud by phone, call the PA Fraud Hotline at 1-800-692-7469.

L&I recommends that individuals who suspect they are the victims of identity theft to file a police report with local law enforcement and provide a copy of the police report to the Office of Unemployment Compensation.

The U.S. Department of Labor recommends that victims of identity theft should also report their information to the National Center for Disaster Fraud. Victims should also consider starting a recovery plan with the Federal Trade Commission.

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