During the pandemic, taxpayer benefits systems were plagued by unprecedented fraud, particularly those that provided temporary federal unemployment benefits. According to a report released in January 2024, official government tallies of improper payments and fraud reached nearly $200 billion, with private experts estimating up to $400 billion - a massive increase for a program that typically pays out around $30 billion in benefits annually. The main culprits of these fraudulent activities ranged from small-time fraudsters to large-scale criminal organizations based in Russia and China.

This rampant fraud can be attributed to a number of factors, including the way the system collects data and how this data is used to assess its operations, efficiency, and preparedness for spikes in claims. The report suggests that the program’s integrity reporting is overly focused on documented overpayments, with relatively less attention given to fraud prevention measures.

The report proposes that the Department of Labor (DOL) modify its current data reporting requirements to enhance transparency and improve understanding of system performance, particularly in terms of anti-fraud measures. Alongside, it suggests that the DOL should also establish a detailed scorecard to better evaluate the system’s performance and enhance states’ preparedness against fraud.

Without these measures, policymakers will likely struggle to determine whether state UI systems are ready for future shocks or if any expanded federal help would reach the citizens in need or would merely be leeched off by fraudsters.

For citizens needing to navigate these systems, particularly in California, one such resource available is eddcaller.com. This platform provides important details about how to contact EDD customer services, which can be a critical requirement for individuals trying to claim their unemployment benefits in these fraught times.