PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Fraud on Prepaid Unemployment Cards Runs Amok

Sarah Grotta by Sarah Grotta
September 29, 2020
in Analysts Coverage, Fraud Risk and Analytics, Prepaid
0
Fraud on Prepaid Unemployment Cards Runs Amok

Fraud on Prepaid Unemployment Cards Runs Amok

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

I suppose this is a sign of the times. As unemployment benefits have ramped up, both at the federal and state level, fraud has also climbed. 

As mentioned in an article from PaymentsSource, the Office of the Inspector General estimated in June that $26 billion in federal supplemental unemployment insurance spent this year will be lost to fraud. That’s just at the federal level; it doesn’t include the billions in unemployment insurance spent by the states. 

With all the technology at the payments industry’s fingertips, and the frighteningly large losses, I would think this would be an area deserving review. Not only is this a loss of tax payer funds, those anticipating benefits are sometimes not receiving them:

The claims being filed by fraudsters run the gamut of impersonating real out-of-work consumers, real people actually still employed and synthetic identities created by fraudsters that mix aspects of real, personal identifiable information (PII) with fraudulent data. One key aspect that is making the insurance fraud so costly is the ease and speed with which criminals are able to monetize the theft, through the use of prepaid cards.

Visa reported that it is working with state unemployment agencies to spot potential fraud through spending patterns. However, that may not be enough as the opportunity is too lucrative to keep fraudsters and other “bad actors” out of the game with so many millions of unemployed Americans filing claims.

Check out this graph of just a few states and their unemployment fraud losses:

One ruse scammers favor is phishing emails that offer to help potential victims speed up the process of collecting unemployment insurance. All that is needed is for a victim to hand over his or her PII data. As millions of Americans already live paycheck to paycheck and losing a job can be disastrous, the offer of help could appear to be a miracle. Unfortunately, for many, it often leads to fraudsters filing legitimate claims on behalf of someone and then stealing their money.

Tia Ilori, senior director of Fraud and Breach Investigations at Visa, offered up some suggestions to curtail these run-away losses:

Ilori noted that some best practices agencies could follow include limiting how many unemployment accounts can be loaded onto a single card. Other practices include setting limits on weekly spend velocity and maximum transaction size.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

Tags: Covid-19fraudPrepaidunemploymentVisa
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    open-banking Data-Sharing as a Solution to Cash Flow Issues standa

    Disjointed Open-Banking System in U.S. Leaves Opening for Permissioned Data Providers

    September 29, 2023
    FedNow

    FedNow Could Mean a Renaissance for Smaller Financial Institutions

    September 28, 2023
    Best Merchant Practices for Dealing with Supply Chain Disruption

    Nearly Half of Merchant Data is Probably Wrong. Here’s Why it Matters.

    September 27, 2023
    Mitigation of P2P Fraud Begins with Education

    Mitigation of P2P Fraud Begins with Education

    September 26, 2023
    digital payments

    Mass A2A Payment Adoption in The U.S. Contingent on Compelling USP

    September 25, 2023
    cashless payments mobile

    The Synergy Between Cashless Payments and Seamless Mobile Coverage

    September 22, 2023
    The Power of AI and How its Transforming the Financial Landscape

    The Power of AI and How It’s Transforming the Financial Landscape

    September 21, 2023
    “You’re a Fintech, I’m a Legacy Bank – How Can We Collaborate?”

    Investing in Fintech: Opportunities and Challenges in the Payments Industry

    September 20, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result