Target 8: ID theft victims threatened with wage garnishment, cleared by UIA

Target 8

LANSING, Mich. (WOOD) — The state’s unemployment agency took action after Target 8 shared the plight of workers threatened with wage garnishment over jobless benefits they never sought, nor received.

“I never thought I’d be so excited to get a call from the unemployment agency,” said Greg Glover of Rockford, who received a call from a state fraud investigator Friday.

The phone call came after Target 8 investigators sent Glover’s name to the state, along with those of several other identity theft victims in West Michigan who’d been trying to resolve their cases for months.

“It was the biggest relief ever to finally be able to talk to someone in person,” Glover said.

“I tried to call multiple times. I’ve written letters. I’ve sent emails. But no reply. Until today. (The investigator) was able to clear my case and lock my file,” Glover continued.

Glover is among hundreds of thousands of Michiganders whose identities were stolen amid the massive wave of unemployment fraud early in the pandemic.

MI ESTIMATES IT LOST ‘HUNDREDS OF MILLIONS’

The Unemployment Insurance Agency estimates it lost “hundreds of millions” of dollars to criminals who filed fraudulent claims under stolen identities.

But taxpayers weren’t the only victims.

Innocent people whose names were used began receiving letters from the state demanding repayment of claims and threatening wage garnishment.

Target 8 first reported on a Jenison Public Schools teacher who, despite notifying UIA of the fraudulent claim through its website as instructed, continued to receive letters ordering her to repay more than $7,000 UIA paid out on the fraudulent claim.

The same day that story aired, a UIA fraud investigator contacted the teacher in question to work toward resolving her case.

Jenison Public Schools also received a call from the state, clearing all three of the JPS employees UIA had been threatening with garnishment.

After Target 8’s initial report Jan. 14, several more identity theft victims contacted our investigators, including Greg Glover.

Most of those whose names Target 8 sent to the state Friday morning reported receiving calls from UIA the same day to begin resolution of their cases.

If you’re struggling to settle your case, despite reporting the fraud as required at michigan.gov/UIA, you can send us an email with your contact information at target8@woodtv.com.

“It was very, very stressful to think they were going to take $13,000 of my money,” said Carley, who got a call from UIA Friday after months of receiving letters demanding repayment.

‘IT WAS VERY SCARY’

“It was very scary because you don’t have any control. If they tell you they’re going to garnish your wages, they’re going to garnish your wages,” said Carley, who discovered last July that the state had paid out $13,000 to someone using Carley’s name.

“I received a call (Friday) from the fraud investigator that she was going to take care of it,” Carley said.

The Unemployment Insurance Agency told Target 8 it’s working hard to resolve 200,000 reports of fraud or identity theft the agency has received since the COVID-19 crisis began.

“Given the substantial number of fraudulent claims filed by impostors during the pandemic, there is a significant volume of fraudulent claims where payments were issued that the Agency has to process,” wrote UIA spokesperson Lynda Robinson in an email exchange with Target 8.

“Because the process to correct these fraudulent claims is a manual process, there will unfortunately be delays for many individuals before their matter is resolved. They may continue to receive the notices until their case is resolved,” Robinson wrote.

Robinson noted the state sent letters in October to people flagged as potential ID theft victims assuring them the state would not take garnishment or collection action against them.

“Garnishments of wages, similar to the process to resolve a fraudulent claim, is a manual process performed by the Agency,” Robinson wrote.

STATE: UIA WON’T GARNISH WAGES OF ID THEFT VICTIMS

“When there is fraud noted on an account that indicated that the individual may be a victim of identity theft, there is no action taken to send a request for garnishment of wages to employers,” Robinson said.

Robinson wrote that in the “rare instance” fraud is not noted, garnishment occurs and the person is later found to be the victim of identity theft, the state would return all garnished wages to the individual.

In late November, UIA made public a review of the agency’s efforts to “balance expedient payment with program integrity.”

At that time, the state reported it had processed 2.8 million claims since mid-March, an amount UIA would normally handle over a six-year period.

“To distribute funds to eligible claimants, UIA had to implement new federal programs while under unprecedented pressure to quickly make payments to the millions of Michigan residents who found themselves without income during a public health crisis and while being targeted by sophisticated criminal organizations looking to defraud the state,” wrote UIA Acting Director Susan Corbin in a November letter to Gov. Gretchen Whitmer’s office.

Deloitte, the firm that conducted the cybersecurity and forensics assessments, noted that steps UIA took so it could handle “historical claim volume” left it more exposed to fraud.

Among those steps, the unemployment agency had brought on contractors and re-assigned “key personnel on the UIA investigations team” to help process claims and issue payments.

The agency also suspended the “10-day hold requirement” on claims in order to expedite payments to families.

Previously, the 10-day hold had given employers time to review claims, which helped identity fraud on the front end.

Deloitte’s report noted the state has since taken “several specific steps … to provide greater organizational focus on fraud detection and improved onboarding and management of contractors.”

The report reiterated UIA’s June estimate that the agency had lost “hundreds of millions” of dollars due to the widespread fraud committed by criminals taking advantage of a worldwide pandemic.

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