Better digital ID can combat pandemic fraud losses
Calls build for better digital verification to stop the rise of unemployment and other forms of fraud
14 November, 2020
category: Digital ID, Government
As unemployment continues during the coronavirus pandemic, more officials and government agencies are looking toward digital ID as the solution.
Indeed, the pandemic shows that the U.S. federal government needs better ID tools to fight fraud, according to reported comments from Gay Gilbert, the administrator for the U.S. Department of Labor’s Office of Unemployment Insurance.
We literally have billions of dollars at this point walking out the door under these programs due to identity theft
At September’s FedID Virtual Collaboration Event, Gilbert said that spiking applications for unemployment insurance over the last few months — applications that have been generally done online — has also brought more opportunities for fraud, with criminals taking advantage of the lack of proper digital ID verification protections.
“We literally have billions of dollars at this point walking out the door under these programs due to identity theft and lack of our ability to deal with that verification. We are the case study,” Gilbert said, according to an account of the virtual conference from AFCEA, a trade group for government, security and associated workers.
Indeed, unemployment claims skyrocketed from about 200,000 to at least 6 million per week, Gilbert said, as the pandemic cost people jobs and governments tried to pump more stimulus into the system.
Digital ID tools that can slow fraud
Since mid-March, people in the U.S. have filed at least 57 million unemployment claims, according to federal figures. That has resulted in a spike in stolen personally identifiable information, the FBI has said, and led to even more calls among various levels of government for better digital ID verification tools to reduce fraud losses.
Such protections could involve the use of real-time selfies, for example, or liveness detection technology. Biometric authentication methods should also play a bigger role in the coming years, according to law enforcement and other experts.
Unemployment fraud is not the only pandemic trend highlighting the need for more digital ID tools going into 2021. As more mainstream consumer and citizen activities moved online since early 2020, secure online account sign-ups and onboarding — for both public sector private and tasks — have taken on more importance.
Even so, recent research from IDology, with provides digital ID and verification services, found that nearly 50% of consumers have abandoned online account sign-up because the process was untrustworthy or too difficult. That’s up from 37% in 2019. More digital ID tools could help arrest that trend.
Digital ID’s perfect storm
“Fraud tactics are becoming more plentiful and sophisticated,” said Christina Luttrell, chief operating officer of IDology. “One of the major impacts of COVID-19 is the pressure for businesses to onboard new legitimate customers safely, which creates problems for those without the proper identity verification systems and processes in place. Now more than ever, success and revenue are tied to a multi-layered defense that can quickly deliver what people want while protecting their information and deterring fraud.”
All that can be easier said than done, including in the public sector, where state governments, especially, are struggling with declining tax revenue and higher costs during the pandemic. But as Gilbert put it, the current woes present a chance for digital ID tools to further prove their worth.
“Our whole (unemployment insurance) system has not slept since February,” she reportedly said during the September conference. In turn, she added, that has “really set up the perfect storm for issues around identity verifications,” she added.