Unemployment claims skyrocket in state, but fraud may be at play

Feb. 12—Statewide claims for unemployment insurance have risen substantially in the last few weeks, including in Frederick County, where there have been more than 1,000 per week through the end of January. But the Maryland Department of Labor said Thursday that fraudulent activity may be the cause of the statewide influx.

"Of the 243,186 new claims filed in Maryland since January 1, 2021, 156,403 claims (64.31 percent) have been flagged as being potentially fraudulent due to new and existing aggressive security measures in place to protect taxpayers and the integrity of the state's program," the department wrote in a press release.

Of those 156,403 claims, 87 percent were confirmed to be fraudulent, according to the release. Most of these were instances in which the verification documents were not provided or the documentation had been denied by the DLLR.

"All employers should carefully review their current and previous benefit charge statements to ensure that all claimant benefits charged to their account are accurate," the press release said. Employers will not be charged for any fraudulent activity associated with their account.

Unemployment claims have also risen dramatically throughout the country since the start of the new year. The U.S. Department of Labor reported an increase of 181,000 unemployment claims in the week of Jan. 9 when compared to the previous week.

Frederick County saw 281 new unemployment insurance claims in the week ending on Jan. 2. The week ending in Jan. 30 saw 1,346 new claims.

While the numbers might not reflect the true amount of claims filed due to the fraud, unemployment is still generally high in the county. The unemployment rate was 5 percent in Frederick County in December of 2020, compared with a 3.7 percent unemployment rate in 2019, according to DLLR statistics.

Rick Weldon, CEO of the Frederick County Chamber of Commerce, said that while the beginning of the pandemic saw a large number of layoffs in jobs of all kinds, hospitality businesses and restaurants in particular might have lost jobs with the cold weather.

"Lately where we've seen a couple bad bumps is when the weather turned and the restaurants that were doing outside service as a part of their business, they had to kind of move away from that," Weldon said. "Because even with a heater, nobody's going to sit on Market or Patrick Street when it's 30 degrees outside."

Weldon has also heard from many people within the community and his own personal life that have not received unemployment benefits, or finally received them after months of waiting.

"The same employment sectors that have just been crushed by this are still being impacted. And then you add into it the challenges with getting through the unemployment system," he said. "Here in Maryland ... I can't describe it as anything other than a train wreck."

Maryland is currently accepting claims for the Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC), and Federal Pandemic Unemployment Compensation (FPUC) programs which were extended by the Continued Assistance for Unemployed Workers Act. Those who are eligible can apply through the state's BEACON System.

Follow Erika Riley on Twitter: @ej_riley

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