State signs contract with LexisNexis to combat unemployment fraud

State also has IBM deal to improve the call center

Ohio will spend more than $12 million enlisting the help of the private sector to solve massive unemployment fraud and improve how the Ohio Department of Jobs and Family Services processes jobless claims.

“The more we can keep fraud out, the better and faster the unemployment system will be for those eligible and deserving Ohioans who are making claims every single week,” Gov. Mike DeWine said Monday during a media briefing on the coronavirus pandemic.

ODJFS will continue to work with Experian consumer credit reporting company but has now signed a contract with LexisNexis, which was founded in Dayton.

The Experian contract is for $8.6 million over six years. The LexisNexis contract is for $2 million. Both are for fraud detection and prevention. Experian will focus on traditional unemployment claims. LexisNexis will focus on the Pandemic Unemployment Assistance program, which was set up to aid people not typically eligible for unemployment, such as contractors and part-time workers.

DeWine called the LexisNexis contract “a new layer of help” to reduce unemployment fraud that is so widespread that even he and Lt. Gov. Jon Husted are among hundreds of thousands of victims across Ohio.

More than 800,000 claims have been flagged as potentially fraudulent and hundreds of millions of dollars was lost to fraud last year in Ohio’s unemployment program. Most of the fraud last year was through the PUA program, though traditional unemployment fraud spiked this year.

Haywood Talcove, CEO of LexisNexis Risk Solutions Government division, said in a Dayton Daily News interview last month that Ohio lagged behind other states in putting systems in place to prevent and catch fraudulent unemployment claims. He said his company could stop the fraud in two days by putting systems in place used by the private sector to prevent fraud.

ODJFS also signed a $2.1 million contract with IBM “to improve claims processing and other customer service enhancements such as self-service adjudication capabilities,” said ODJFS spokesman Tom Betti.

“We are confident this will speed up processing time of legitimate pending claims. This will be utilized in both the traditional unemployment program and PUA,” he said.

Matt Damschroder, whose first day on the job was Monday as interim director of the ODJFS, said the agency and vendors recognize the urgency needed to improve Ohio’s unemployment system.

Key to the improvements is the ODJFS Public-Private Partnership team with participation from 12 private sector companies in five industries, including financial services, insurance, processing, technology and advisory.

The team’s top three priorities are fraud prevention, claims and adjudication and the call center, said team leader Jeff Ficke.

The team has five early recommendations:

  • Strengthen fraud prevention efforts by expanding roles for LexisNexis and Experian.
  • Clear case backlog to put benefits into the hands of eligible Ohioans as soon as possible.
  • Improve call center experience and ensure Ohioans’ questions are answered more quickly with IBM Watson technology.
  • Review third party vendor responsibilities to ensure their performance aligns with expectations as they share responsibility for the ODJFS unemployment program success.
  • Consolidate data into a single repository that enables data-driven decisions, establishes performances goals and measures results.

“We’re very confident that in a very short period of time we’re going to put a more secure door on the front of the organization to stop the fraudsters,” Ficke said.

About 1.25 million unemployment cases are pending adjudication, and Ficke said a partnership announcement is upcoming on how better technology would be used to segment the claims to pull out those with zero indications of fraud to process them faster.

Improvements planned for the call center would include automated answers to common questions and a better routing system to put callers in contact with the appropriate staff.

The U.S. Attorney’s Office last week arrested three people on charges related to unemployment fraud in Ohio. The three, all from Columbus, are charged with claiming tens of thousands of dollars in illegitimate unemployment claims in their names and others’ in Ohio and other states. They also face drug charges.

“This is certainly welcome news,” Betti said. “Unemployment fraud and identity theft is a widespread national problem in every state and is under federal jurisdiction. ODJFS is committed to working with our federal partners to protect Ohioans and bring those committing unemployment fraud to justice.”

About the Authors