Startup’s claim on scope of unemployment fraud was baseless, U.S. Congress says


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OAKLAND — Government contractor, which checks the identity of benefits applicants, had no basis for its claim that almost half of unemployment aid during the pandemic was lost to fraud, U.S. congressional investigators said on Thursday.

A pair of House of Representatives panels investigating said the startup had failed to provide backup for Chief Executive Blake Hall’s headline-grabbing assertion last year that fraudsters had secured more than $400 billion in unemployment insurance, a figure three to 10 times higher than government estimates.

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Representative Carolyn Maloney, chairwoman of the Oversight and Reform Committee, said she was “deeply concerned about providing inaccurate information” as it was bidding for government contracts. said it was reviewing the panels’ findings and did not have immediate comment.

Congress began investigating after former employees, government watchdog groups and lawmakers complained the company had been unprepared to handle an onslaught of unemployment insurance applications early in the pandemic.

It uses facial recognition technology to match applicants’ selfies to photo identity documents. But 10 to 15 percent of benefit applicants struggled to get verified through the automated system and were directed to video chats with, the wait times for which reached an average of more than four hours in 14 states, investigators found.

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While Reuters and other media last year reported on the waits, investigators said their analysis definitively showed that issues had been widespread.

“We must continue to work to ensure that, in the future, companies hired to implement critical programs are up to the job,” said Representative Jim Clyburn, chairman of the Select Subcommittee on the Coronavirus Crisis.

The Democrat-led committees are continuing to investigate other concerns about, including the accuracy of its facial recognition system and the adequacy of its support for non-English speakers. But priorities could shift when Republicans take control of the House in January.

(Reporting by Paresh Dave; Editing by Bradley Perrett and Lisa Shumaker)



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