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Comment by nickysielicki | Hacker News Reader

I understand the concern that people aren't getting help when they need it, but the numbers around unemployment insurance fraud are unbelievable. Axios reported that as much as half of all unemployment insurance paid out has been stolen. [1]

My dad was one of the 21.5 million who had their SSNs stolen as a part of having a government background check done [2], and a couple weeks ago he was personally a victim of someone fraudulently applying for unemployment benefits on his behalf.

I'm not saying that facial recognition is a reasonable way to try to fix this, but we're talking about $400,000,000,000 being stolen. They have to figure something out.

[1]: https://www.axios.com/pandemic-unemployment-fraud-benefits-s...

[2]: https://www.nytimes.com/2015/07/10/us/office-of-personnel-ma...

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> I'm not saying that facial recognition is a reasonable way to try to fix this, but we're talking about $400,000,000,000 being stolen

No, we’re talking about a firm whose business depends on the perception of the magnitude of the problem claiming that. The source of that number in the article you cite is...the CEO of ID.me.

And when pressed by CNN to support that staggering figure ID.me responded with...promotional material for their product, instead. [0] It couldn't be any more clear that its a BS number the CEO pulled out of his colon for promotional reasons.

[0] https://www.cnn.com/2021/06/10/politics/what-matters-unemplo...

Perhaps someone should be FOIAing agreements between state unemployment departments and ID.me, and perhaps even the Veterans Administration, the Social Security Administration, and other federal agencies (mentioned in the posted article) who are leveraging a private firm for identity proofing services using facial recognition.

Fraud should be prevented, for sure! But a private corporation black box governing access to social safety nets is not to be tolerated.

I don't think it should be legal for either the state or federal government to outsource such a sensitive and important function.

I agree.

https://login.gov

https://www.gsa.gov/blog/2021/02/18/logingov-to-provide-auth...

https://www.congress.gov/bill/116th-congress/house-bill/8215...

https://billhunt.dev/blog/2020/12/18/federal-policy-recs/#4-...

This is not great. It's using the current issues to push for an ID system that could be leveraged by private parties and is thus likely to significantly reduce online (pseudo)anonymity. It also explicitly calls for the involvement of the private sector in delivering any solution.

I want state governments to have a reliable online identity option. I want it to be optional by law - I should be able to make an in person visit instead. I do not want private parties to have any access to the service whatsoever. I want private sector outsourcing of such services to be completely outlawed. No private third party has any business knowing about my interactions with any government provided service.

I should never have to share my data with private third parties in order to receive government services. Such usage data is very sensitive and thus a huge privacy concern.

Consider: If you ever had to go on food stamps, would you want retailers, potential employers, etc to be able to purchase that data? What about the risk of a data breach?

You should not expect anonymity when obtaining government services, full stop. That is the entire point of identity proofing and, at a higher level, identity and access management. I agree a private entity should not be required in the verification chain for interacting with government and obtaining government services.

My last link points to a blog recommending the USPS provide in person proofing, which I believe meets your in person proofing requirement. Login.gov is a service operated by the US government's GSA agency. It is not a private entity providing this service. It was developed as part of 18F and the US Digital Service.

I don't expect anonymity from the government (I suspect that would be a fairly absurd goal given current technology). Rather, I expect that absolutely no one other than the government should ever have access to such data.

My apologies for the misunderstanding. That's a high hill to climb, and I recommend engaging with policymakers to see that sort of legislation crafted and sponsored.

Why is that a high hill to climb? It's more like a slippery slope. Until recently it was definitely the expectation that your government information would stay only IN the government.

It seems wasteful to spend this thread rehasing the utter disregard the legislative branch has for enacting strong data and privacy legislation (California's CCPA aside), Equifax's willful ignorance towards data security with no consequences for them and no recourse for citizens who had their data leaked, etc. It's not easy, it hasn't been done yet, and it's a high hill to climb. Have to get in front of the folks who write the law, who currently aren't making it a priority.

Fair enough, the situation on the ground is at significant variance with people's expectations.

> My apologies for the misunderstanding. That's a high hill to climb, and I recommend engaging with policymakers to see that sort of legislation crafted and sponsored.

It might be a high hill, though softening to allow contractors involved in providing the service to know but requiring them to observe privacy rules similar to what would apply in the healthcare space under HIPAA, would make it much lower.

At the state level, for either version, I would recommend, if possible in your state, you to work with advocacy organizations who are willing to sponsor a public ballot initiative rather than focussing on policymakers alone; while industry insiders can and will buy ads against ballot measures, they can't cut them off by compromising strategically targeted legislators the way they often can bills in the legislature.

Anonymity and privacy are not the same thing

National, standardized, digital ID is inevitable.

Very difficult in the US because the Federal government has no authority to require one, and the Supreme Court has consistently ruled that any regulatory or back door methods to effectively achieve a similar result is not legal.

It is one of the reasons ID resolution in the US is largely outsourced to private entities, which have no such restrictions.

> Very difficult in the US because the Federal government has no authority to require one,

It absolutely could require one for functions within the federally-regulatable sphere, and not prohibit its use for private and state functions.

(If it was national-but-decentralized, it could just set standards for the digital ID and let states issue them, the same way it has for physical ID, see, e.g., REAL ID.)

The pay is INSURANCE which employees can not opt out of paying the premium when employed.

Just because some States are mandating this privacy invasion does not mean it is legal. This appears to have not yet been tested in the courts.

From your article:

> The US Department of Labor Inspector General Office in late March estimated that at least $89 billion of the estimated $896 billion in federal unemployment program funds could be paid improperly, with a significant portion attributable to fraud. This is based on a historic improper payment rate of at least 10%.

This is lazy BS from the other side; they know for a fact that the rate of fraud is going to be higher than it was pre-COVID. We know how much has been paid out and the only question is what the fraud rate is.

I agree that you have to be skeptical given that id.me is selling a product, and to be honest, I only put two-and-two together after making my comment and revisiting the axios article since I first came across it. That being said, given how many states are using id.me, they have unique visibility into the problem and I don't think it's fair to write them off as entirely untrustworthy.

tl;dr: The number is probably between $100B and $400B. It's hundreds of billions of dollars either way.

Fraud is a subset of that 10%, it could 10% of the total improper payment rate aka 1% of the total.

Assuming it’s higher with covid seems without justification is just an assumption. If anything it might be lower if a higher percentage of people applied for unemployment without quickly finding a new job.

That's fair. But the general consensus among media and government agencies has been that the rate of fraud (and not just the overall amount of fraud) is higher. ie: in Maryland

> According to the Maryland Department of Labor, as of July 13, 1,443,211 or 92.31 percent of all out-of-state and in-state claims were confirmed as fraudulent.

https://www.wmar2news.com/unemploymentguide/several-arrests-...

Again that 92% could be true, but those are clams not money actually being handed out. That said, if under 8% of clams where legitimate then paying out 50% incorrectly might actually be accurate.

> This is lazy BS from the other side; they know for a fact that the rate of fraud is going to be higher than it was pre-COVID.

As a percentage of total claims? I don't think they know that. What's the reasoning? Obviously, both numerator and denominator would go up, but beyond that...

>Axios reported that as much as half of all unemployment insurance paid out has been stolen.

Oh hell for NJ you can just send in fake unemployment claims to any business and the burden is on the business to dispute every claim. If they fail to respond or it's lost in the mail then it effectively defaults and the state pays out the scammer. I have a folder of fake claims to my company over the years.

A few years back the state decided to pay one of those false claims out for a women I've never met that doesn't even live in my state, I filed the fraud report, tried to dispute it in the mail, met with my state representatives about it, called the courts, and ultimately never got a resolution.

Being stuck with having to pay a higher (we'll call it tax) rate for my own salary, I instead paid distributions for the rest of the year and converted the business from S-corp to single member LLC out of spite.

When COVID rolled around and I was eligible to collect unemployment for a month or so last year, I filed a claim that's been stuck in 'pending' since April 2020. Yay shitty COBOL code, I guess.

>They have to figure something out.

Or acknowledge that it's fucked beyond repair and replace it with something else like basic income. It'd likely be cheaper and more efficient.

half of all unemployment insurance *during the pandemic*. 10% in 2019 (https://www.wsj.com/articles/unemployment-fraud-spreads-acro...)

Conservative legislatures and governors/presidents have spent the last few decades gutting the agencies that handle unemployment, and then suddenly an extra 10% of the country is unemployed for weeks. Yeah, we're gonna see an increase in fraud.

In my deep blue State, progressives have had control of the government for a long time. They sent the better part of a billion dollars in unemployment aid to literal Nigerian scammers. No one even disagrees that the cause was gross negligence and incompetence. “Mistakes were made.” Somehow, the person responsible for this hilarious and shameful episode failed upward and is now a member of the Biden administration.

I’m sure “conservatives” are responsible for many ills but where I live this isn’t one of them because they were never involved. If you want to fix it, you have to be honest about the problem.

> If you want to fix it, you have to be honest about the problem.

If you read the comments on this topic it’s pretty clear that there are a bunch of people that don’t want to fix the problem.

That does not absolve those who responsible for the problem of any culpability. Whataboutism isn’t valid response. The problems with unemployment aid were bipartisan. In my State, the Democrats own that mess because they created it. That isn’t a partisan assertion, that is a non-controversial observation of reality.

I’ve never been a conservative but I am not so much in denial that I will pretend that the comedic failure of execution at the State level by Democrats was actually the fault of some nebulous “conservatives”. The conservatives were never involved. The Democrats own that failure, and you would hope they have the self-awareness to recognize that.

We don't like hearing negative things about Democratic party on this forum.

Democrats seem to be judged by their intentions not their results

Republicans seem to be judged by their results and if the results are perceived bad their intentions are asssumed to be malicious and based in an ism or phobia of some kind

Btw, I am a Democrat and occassionally I'd like to call bullshit on many things. Challenge our own assumptions. But in last couple of years, that's become really difficult. I am vehemently against censorship and it appears to me that Democrats have unconstrained power since Big Tech and the entire internet is on our side. This is feeling a bit dangerous to me.

Your comment on Republican party is spot on. I'd be down with a more centrist and less populist party - Lincoln party would be something I'd consider.

I also don't take politics as seriously as so many people in this country. It shouldn't consume you. It should be a peaceful debate with picking good points and rejecting crazy ideas.

My biggest criticism of HN is that it doesn't know how to handle conflicting interests and most people here have lost their ability to speak freely and against mainstream. It used to be that HN was a contrarian community with lots of interesting perspectives without downvotes. It's no longer the same. My hunch is that social media is shaping the world to be more in-line with mob mentality and it is dismantling the founding principles of America. America is headquarted in Menlo Park, CA.

I am a small l libertarian, have observed politics since the mid 90's it has been interesting to see how how the political parties have changed

Democrats seem to think they Republicans have gone "far right" but from my point of view the both have shifted to the left socially with the democrat party taking a HUGE left turn starting around 2008, but really accelerating in 2016...

Where Socially republicans are more "left" or libertarian on many social issues from Gay marriage to Abortion[1], and economically are more open to "Blue Dog" democrat economic positions but now Democrats are "Democratic socialism or nothing".

[1] I recognize with Abortion there are a few state laws they may go against this statement, but this is a direct reaction to Democrats moving away from "Safe, Legal and Rare" of the 90's to full on celebration of abortion as a primary birth control method and women's empowerment issue.

I don’t think that’s the whole picture. Free trade has virtually no defenders now and deficit hawks few and far between, especially when their party is in power. Even a strong dollar and low inflation don’t have many defenders anymore. Basically the American public have given up on free market economics and are now squabbling over the best way to manipulate it.

That is kinda what I mean by republicans are more open to blue dog positions from the 90's... More Social Safety net, more money printing, more debt, and even more taxation.

This would have been unheard of in the 90's for a Republican, now today the difference is "Do we Print and spend 3 Trillion or 6 Trillion this year?"

Sadly for me I think the full effects of these terrible economic polices are going to hit about the time I ready to retire. 10 Years go I did not think retirement would be an option.. 2 years go I saw some hope... Today I am back to believing I will work until I am dead as there is no way these economic policies we see today will work out well for anyone.

Bill Clinton was a free trader and ran a surplus. I don’t think this has to do with the Republicans turning to the left. They are going back to an older, nativist, version of the right.

Bill Clinton ran a surplus because of the 1994 Contract with America and He had a strong Republican controlled Congress that he had the desire to work with to get things done.

unlike today where no one wants to work together to get anything done as the other side is "evil"

I am not sure what you believe an "older, nativist, version of the right" looks like so I can not possible comment on that

In case it wasn’t clear I’m with you. As someone that’s lived almost all his adult life in a deep blue city in a blue state, I’m not a fan of letting incompetent or corrupt politicians and civil servants off the hook merely because they share my party registration. Competence matters.

I don’t understand why you’re getting downvoted. Maybe naming the state would help?

The Europeans on this forum downvote anything with a hint of criticism of the US center-left. It's like the $.50 army except they don't get paid.

I mean Blue America isn’t exactly Denmark. California is the richest and poorest state in the country.

Edit: I live in a very well run part of blue America. Strong focus on good governance. The local dems try very hard to distance themselves from national politics.

Care you tell us where you're from? I'd like to move to a place which is well run (Blue or Red, doesn't matter).

Currently living in the Bay Area, it feels like a proper third world country just like Seattle, Portland and LA. All happen to be Blue cities.

Madison, WI. I moved here from the Bay Area. Strongly recommend it.

I'd imagine the republicans are good friends with said scammers and their war chest profits from the scam

Huh? CA hasn’t had a Republican majority in its legislature in a couple decades?

Eventually those govts have to take some responsibility for the rampant fraud.

Colorado sent me an unemployment benefit debit card. They get some credit for using my actual address (some scammer was hoping to steal it from our mailbox, I guess?) but they should have noticed I’ve lived in California for a decade and have literally never been employed in Colorado.

Typically that type of issue is addressed in audit. There’s no requirement that you live in a state to collect or file for unemployment. UI validates against IRS data and may or may not know where you are based out of.

My guess is some project manager at a fraud boiler room stuck your zip code in in the “CO” folder instead of “CA”. The people who file these claims are literally on the phone all day and know what to say.

> Axios reported that as much as half of all unemployment insurance paid out has been stolen.

I can't help but notice that people tend to talk about unemployment in terms of percentages instead of in terms of dollars. While 2020 was obviously an exception it looks like the US has paid out generally around $30billion most years: https://fred.stlouisfed.org/series/W825RC1

Lots of companies make more than every year in pure profit, not just revenue. Apple and Google made more than that last quarter:

https://www.macrotrends.net/stocks/charts/FB/facebook/gross-...

https://www.macrotrends.net/stocks/charts/GOOG/alphabet/gros...

https://www.macrotrends.net/stocks/charts/AAPL/apple/gross-p...

https://www.macrotrends.net/stocks/charts/MSFT/microsoft/gro...

These companies are all doing the "Double Irish" tax dance, so how much of that profit do you think is flowing back into the USA? I feel like if it were really about the dollars we would be fighting these corporate tax arrangements instead of trying to make poor peoples' lives even worse than they already are.

Your argument is that high levels of fraud by international crime syndicates isn't the real problem, the problem is that we don't tax corporations enough to be able to withstand that fraud?

I'm sorry, that's completely ridiculous.

When you profile code, do you spend your time fixing the most resource-intensive function or the function whose name you don’t like?

Maybe you disagree with the suggestion that there are way, way bigger fish to fry, and we should prioritize our limited resources accordingly. But to say that it’s “completely ridiculous?” That’s a little over the top.

In your analogy your implication would be that the software engineer should spend their effort in the corporate boardroom arguing for changes in product requirements rather than in fixing bugs in the current product.

The requirements are fine, the requirements are to pay 20% tax on your profits.

The bug is in the code, the interface with international trade. It's allowing many orders of magnitude more tax to disappear than the pesky unemployment fraud code.

So no, I think his analogy is solid, the requirements are clear, the implementation is at fault.

I am sure many including myself are going to disagree with the assertion that the "requirements are fine"

For fucks sake one is breaking the law. Corporations are following the law. There is no requirement that corporations pay 20%, that is crap you made up.

The law is quite clear on fraud.

In the analogy the law is the requirements, enforcement is the implementation. You don’t like the requirements, sure. The implementation is still broken because it doesn’t address the fraud. It can’t do anything about the requirements because those are outside the scope of things that can be changed by the implementor.

The analogy is absolutely shit because it presumes the same actor writing the code can change the requirements, which is not true in software engineering nor in the US government.

It’s completely ridiculous because those companies aren’t breaking the law.

To your code profiling analogy, we’ve seen a problem and the solution proposed is just to buy more hardware to workaround it.

> It’s completely ridiculous because those companies aren’t breaking the law.

Yes, that makes it worse, unless you think the poor can afford to do a lot of lobbying for more favorable tax laws.

So your answer is we shouldn’t enforce laws because there exist law abiding rich corporations? It’s not even logically coherent.

I’m all for passing laws to repeal tax exemptions but that has jack shit to do with massive fraud.

You don’t encourage reproduction to deal with a murder problem.

it's that we don't really tax them at all. we spend so much money and time chasing pennies rolling away on the floor while the vault is being robbed.

The GDP of the US last year was less than 21 trillion, and we're talking about fraud that's allegedly 400 billion. Ergo, we're talking about ~2% of GDP. That's not "chasing pennies."

To put that in different context, 400 Billion is about 4x as much as the federal government spends on education. It is about 15x what we spend on energy infrastructure.

400 billion is a 2% of GDP but >10% of the federal budget.

https://en.wikipedia.org/wiki/United_States_federal_budget#/...

400bn is so patently false.

The money is taxed when individuals finally get it, assuming they are US residents or citizens and earn above the minimums required to pay taxes. Corporations don't need to pay taxes at all in theory; it just double-taxes the same income and leads to the govt adjusting rates accordingly to achieve the same outcome (e.g., avoid driving corporations overseas with an uncompetitive high tax regime, which the US currently has).

The money is taxed before it reaches individuals. That’s all still future tax money.

The dollars are relevant, but the widespread fraud is the more important aspect.

> the widespread fraud is the more important aspect

Agreed!

In the five years preceding 2020 the US averaged ~2million people claiming unemployment (high of ~2.4, low of ~1.7): https://fred.stlouisfed.org/series/CCSA

Amazon's employee headcount alone could make up half of that figure, at ~1.3 million in 2020: https://www.macrotrends.net/stocks/charts/AMZN/amazon/number...

Add a few more big corporations and I agree we have a very widespread problem:

https://www.macrotrends.net/stocks/charts/AAPL/apple/number-...

https://www.macrotrends.net/stocks/charts/GOOGL/alphabet/num...

https://www.macrotrends.net/stocks/charts/MSFT/microsoft/num...

They told me the wealth will trickle down, so why are we looking at the people already on the bottom to get the money flowing when there's a clog? I guess we're on the Golden Standard after all.

The number of employees has what to do with people defrauding unemployment insurance?

You do know that the discussion is about people who are abusing unemployment, not unemployed people, right?

> You do know that the discussion is about people who are abusing unemployment, not unemployed people, right?

The effect of combating so-called "abuse" can only make it harder for everyone who legitimately needs unemployment. These people are already time-poor in many other ways (e.g. riding a bus vs owning a car), and every additional hoop you make them jump through means a certain percentage will just give up and suffer. You understand this, right?

> The effect of combating so-called "abuse"

We’re talking about people who are stealing money meant for unemployed people and you can’t even bring yourself to admitting that is even a problem. If you’re going to scare quote “abuse”, why don’t you steal from unemployment as well since you don’t seem to think there is anything wrong with it?

> percentage will just give up and suffer.

This is already happening with the existing paperwork. What are you doing to advocate that people don’t even need to pick up the phone or get out of bed to get their unemployment?

> You understand this, right?

You understand that rampant fraud can cause the collapse of the entire setup right?

Double Irish doesn’t even exist anymore. The least you could do is keep your off topic rant up to date.

So you’re presented with a massive amount of money that is being stolen and your answer is to just raise taxes to make up for it?

I guess I don’t really understand why unemployment payments don’t “come” from the (former) employer? They already know the direct deposit details and have a rough idea of the eligibility. It seems like the easy solution would be for a partial “paycheck” to keep being deposited and have the state make payments to the employer, instead.

If Acme Corp. gets an unemployment claim for an employee who’s still working they’re in a much better position to quickly recognize the fraud. And if they get a legitimate claim for a former employee but to a previously unknown bank account it’s easy enough for them to get in touch with the employee to double check the details.

Acme Corp's unemployment insurance premiums go up when their employees file claims. It's in their interest to deny claims. You'd be moving fraud around somewhat.

Is it possible that the total fraud would be lower because most businesses would prefer to follow the law and not be busted? Maybe, but it's hard to say.

In California the UI office will get in touch with your former employer to verify your claim. So there's that at least. Not to mention, what do you do when people lose their jobs because the employer has gone out of business?

Unemployment insurance is part of the social safety net that is paid to the State. Among many other issues with tying this to the employer (much like with healthcare), the employer may not even exist anymore but the former employee is still entitled to unemployment.

States that weren’t doing it from the beginning did start checking with employers to determine if a person was actually unemployed.

It's make more sense for them to be distributed by the tax authorities, but we love to do things the stupid way.

The tax authorities don’t do such a great job of making sure they send the money to the right people either.

Unemployment benefits in the US are distributed by the tax authorities, i.e. state governments.

No. In California, for example, unemployment is handled by the Employment Development Department, taxes are handled by the Board of Equalization.

It is still the CA government, the important point being they would have access to same information and privileges.

I think you're missing the point that the tax authorities tend to have relatively up-to-date information because most people file tax returns annually.

'It's all the government' isn't helpful because government is large and complex and doesn't have any kind of central consciousness. You are conflating legal sovereignty with (the authority by which government operates) with operational efficiency.

That can probably be fixed with a flick of the pen by the governor. The point is, the problem is simply clerical, not organizational or otherwise difficult to overcome.

Imagining a thing and promulgating it through a messy and extremely inconsistent organization like a state government are two different things. Surely you've experienced the situation where an apparently simple concept requires a surprisingly large amount of code and time to implement.

I had someone file for unemployment in my name. I got an email from our Human Resources telling me my unemployment claim was rejected because I’m still employeed, with some information about what to do next if I hadn’t filed the claim (I hadn’t)

> I guess I don’t really understand why unemployment payments don’t “come” from the (former) employer?

So now employees are financially reliant on employer that just fired them?

I think this is a bad idea as well, but you're not eligible for unemployment if you've been fired.

you're eligible if you've been wrongfully terminated. if you're fired for showing up drunk to work then that's termination for cause, and you can't get unemployment, but if you're fired because your boss decides he wants a blond secretary and you're a brunette, you can absolutely collect unemployment.

If you're fired for cause.

I've had several former employers I wouldn't have wanted to maintain any sort of relationship with, for reasons up to and including them being likely to try some sort of mitm shenanigans and commit the fraud themselves.

I think this situation might be a strong case for better id verification and ubi. We've got the cryptographic tools, the funding, and the evidence that other systems are failing terribly. We just need the political will and legislative implementation - Yang had a great foundation for it.

How expensive is thus facial recognition tech?

I'd rather pay out tax money to fraudsters than send the same amount to "people who will keep the money away from fraudsters"

> but the numbers around unemployment insurance fraud are unbelievable. Axios reported that as much as half of all unemployment insurance paid out has been stolen

If we’re talking about theft, why not talk about government bailouts of banks, low inheritance tax for the 1%, the corrupt military contracts and the millions of other ways the elite plunders the commons and steals from the working class?

I’m pretty sure when we have the numbers somewhere in the future, unemployment insurance fraud will be a drop in the bucket compared to all of that.

Also, seeing the level of alienation; the miserable conditions of American ‘jobs’ these days (I’m looking at you Bezos), I seriously do not blame people for trying to get more cash to escape their exploitation.

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