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Labor and Economic Opportunity

What Is Fraud?

  • What is Fraud?

Intro

  • UI Fraud is a crime, and it affects everyone. It drives up unemployment taxes for businesses, it affects people with legitimate unemployment benefit claims, and it puts a strain on the state’s unemployment trust fund. The person committing fraud could be a claimant who is intentionally misrepresenting information being provided to the Unemployment Insurance Agency (UIA) when filing and/or certifying for unemployment benefits or could be a traditional fraud matter whereby a criminal is impersonating or representing themselves as a claimant for unemployment benefits. In every instance of fraud, individuals may face criminal prosecution, fines, and penalties of up to four times the amount.

Types of Fraud

Types of Fraud

  • Claimant Fraud

    • Working while collecting benefits and not reporting hours of work and earnings to MARVIN;
    • Supplying deceptive information or failing to disclose information such as vacation/holiday pay, severance pay, or other pay after job separation;
    • Providing false work search efforts;
    • Failing to report not being able and available to work (ill or injured, on vacation) while collecting UI benefits;
    • Using another person’s identity (name or social security number) to work and/or file a UI claim;
    • Failing to report refusals of work;
    • Providing a dishonest reason for separation.

    Employer Fraud
    Individuals or businesses that deal in cash only or use other schemes to hide their activities and their true tax liability such as:

    • Providing false information to prevent an otherwise eligible claimant from obtaining benefits;
    • Paying employees “under the table” to avoid paying taxes;
    • Incorrectly reporting wages;
    • Intentionally misclassifying employees as independent contractors.

    Identity Theft

    Identity theft occurs when someone uses another person's information—including wage, employment, and credit card information—to take on their identity. Identity thieves can also use another person’s name, Social Security number, and employment information to illegally file UI claims and collect UI benefit payments.

    If you suspect that identity thieves have used your personal information, or the personal information of one of your employees to file a false UI claim, it is essential that you act fast to help the UIA stop an imposter claim.

How Does the UIA Detect and Prevent Fraud?

How Does the UIA Detect and Prevent Fraud?

    • UIA Fraud Manager Program –utilizes proprietary scoring determined from an examination of fraudulent claims to identify claim inconsistencies.  This proprietary scoring program has been the single largest influencer in combatting the rampant number of fraudulent claims filed from 2013 through 2017. 
    • Multi-Agency Fraud Workgroup – participates in a workgroup across all state agencies to root out fraud and identity theft in the State of Michigan through collaborative efforts across many Agencies.  Data-sharing of known identity theft victims and criminals is performed through the use of a Suspicious Actor Database with the goal of protecting the citizens of Michigan who are known victims of identity theft from continued harm.
    • Treasury Offset Program – Michigan is participating in a federal program in which states can submit delinquent overpayment accounts to the IRS for purposes of intercepting federal income tax refunds.
    • UIA utilizes a team of Regulation Agents, in collaboration with the United States Department of Labor's Office of Inspector General, the US Attorney's Office and the Attorneys General Office, Michigan State Police and other enforcement agencies.