ID.me Stops $1 Billion Weekly in Unemployment Fraud

This ID company called ID.me has advised the public that they are blocking about $1 Billion in fraudulent unemployment claims each week with their technology.

According to news sources in Florida, the problem of unemployment fraud is escalating and the state, like many others have turned to ID.me to help curtail the problem.

The scope of the problem is that $200 billion of fraud is going to fraudsters,”

Pete
Eskew, Senior Vice President of Public Sector at ID.me

Eskew said that money is often wasted on scammers overseas. “We’re talking organized crime in China, Ghana, in Russia, that have left the shores of our country already,” Eskew said.

Primary Types of Fraud Detected by ID.me

ID.me has tracked unemployment fraud and they have found that unemployment fraud breaks down into certain categories according to WTSB.com. Surprisingly about 70% of unemployment fraud is undetermined.

  • Basic Identity Theft (18% – 20% of Claims): An attacker leverages stolen personal data to file a claim in the victim’s name.
  • Social Engineering (7.5% – 10% of Claims): An attacker convinces a victim they are verifying their identity for a job or to get prize money
  • Face Matching (2% – 2.5% of Claims): An attacker holds up a picture, video, and increasingly a computer generated 3-D printed mask of the victim’s face. 
  • Prisoner Fraud (Unknown % of Claims): Incarcerated individuals who are ineligible to file claims do so anyway.
  • First-Party Fraud (Unknown % of Claims): An attacker convinces a mule (an individual who knowingly aids the attacker) to let the attacker file a claim in the mule’s identity in exchange for a cut of the claims payment. The mule then contacts law enforcement and pretends to be a victim of identity theft.
  • Synthetic Identity Theft (Unknown % Claims): An attacker creates a fictional identity in credit records and uses the fake or synthetic identity to file a claim for an identity that does not exist

ID.me Is Used By Many States

ID.me is stopping about $1 billion in fraud weekly, which is impressive and scary at the same time given that they are only used in 21 states and the other 29 states are left unprotected.

The 10-year-old startup, ensures that every person who receives benefits is actually eligible by verifying their identity with technology. ID.me provides an app to the states where users can upload pictures of their government documents, like a driver’s license and passport, as well as a selfie. The company then uses A.I. algorithms and facial recognition to authenticate the documents and compare ID pictures to the new selfie.

The company started in 2010 as TroopSwap working with the military to provide retail deals for service members. They had to develop an application called TroopID to verify that the people claiming military benefits had actually served.

The company realized the larger opportunity and formally changed its name to ID.me in 2014, with the purpose of pursuing the wider field of identity verification.

The company claims a face match rate of 95%, so it is not perfect, and they have faced criticism from consumer advocate groups that claim the system is rejecting real people that need their benefits. Worse yet, statisticians who have studied these facial recognition identity apps have found that the systems have lower match rates on darker skin tones so they might discriminate against people of color.

I am Frank McKenna, a fraud expert from San Diego. The views and opinions expressed here are entirely my own and do not reflect those of Point Predictive.