LINCOLN- The state labor commissioner reported Monday that the unemployment system has battled fraud at an 'unprecedented level' during the pandemic. Commissioner John Albin assured lawmakers that Nebraska added more security measures which have been more successful than the national average in detecting and preventing fraudulent claims. Nebraska's average fraud rate is at 2.43% whereas the national rate sits at 4.35% (these rates only looking at traditional unemployment, not pandemic relief).

“Nebraska, and all states for that matter, has had to continually evolve its fraud response,” he said. “The type of fraud and the brazenness of the attacks had never previously been experienced at this level in unemployment systems.”

Bellevue Senators Carol Blood and Jen Day wrote a letter to the commissioner asking him to estimate the dollar amount of losses and how this can be prevented going forward. In the response, Albin said it is speculative to estimate the scope of fraudulent claims.

The Nebraska Department of Labor identified $89.2 million worth of 'overpayments' in 2020 or 2.2% of the total pay out from all state and federal unemployment programs. $62.5 million of those overpayments have been recovered so far. Albin continued on to say the federal coronavirus relief legislation 'created a system designed for fraud'. PUA benefits were the most common fraud because the claims were not able to be cross-checked against the state and national directory of new hires. Identity theft also increased drastically during the pandemic.

In December, the state began requiring two factor authentication for claims but it is still possible to get around those blocks.

“The fraudsters are really good with their criminal activities,” he said. “It’ll be a battle throughout the end of these federal programs.”

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