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Identity Insights: PUP Fraud and Financial Crime

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[vc_row][vc_column width=”1/1″][vc_column_text]Identity Theft and Fraud in PUP & Pandemic Relief Packages.
ID-Pal BI Analyst, Tanzeeb Iqbal

In March 2020, the Republic of Ireland introduced the Covid-19 Pandemic Unemployment Payments (PUP) to support citizens who lost their jobs across several sectors when businesses were forced to close. The PUP initially offered recipients a standard package of €203 per week. From the 24th of March 2020, the payment was increased to €350 per week. Later in July 2020 the payments changed again to be assessed based on  the recipient’s weekly income prior to the pandemic.

There is always a risk of fraud by users who attempt to make financial gains through fraudulent means. Unfortunately, it has now come to light that the Irish PUP scheme was not sufficiently protected from the risk of fraud and bad actors seeking to commit identity fraud and financial crime.

Fraud within the Irish PUP

A 2021 Gov.ie report revealed that there was total of 850,000 successful PUP claims made, with 20 million PUP payments valued at over €6.3 billion being paid to recipients.

In September 2021 however the issue of fraud within the Irish PUP emerged. According to the Independent.ie, more than 140 cases of fraudulent PUP payments were claimed using stolen PPS numbers. These numbers are just till May 2021 and is the tip of the iceberg as the real numbers are said to be much higher.

Examples of fraudulent claims where charges were brought against the individuals included:

  • Extorting PUP funds through fraudulent activities.
  • False claims for PUP based on being resident in Ireland but residing overseas.
  • Falsely obtaining PUP through use of a fake personal public service (PPS) number, submitting a fake passport and being in the possession of falsified documents.

But how many PUP claims in the Republic were received that were in fact ineligible?

A review of a sample of claims by the state auditor found:

  • nearly one in 10 of the claims reviewed were not eligible
  • in under half of the cases reviewed the individuals were not eligible to claim the PUP but they had been receiving the payment while still working
  • In a quarter of cases there was no evidence the PUP claimant had been working prior to the pandemic, and in another quarter of instances the PUP claimant appeared to have returned to work during the PUP claim period

The scope of the fraudulent activity uncovered indicates that there were key weaknesses in the process that when left unattended, allowed fraudsters to step in.

The long-term cost of PUP fraud to the Irish economy

Reports into overpayment of PUP and fraudulent claims uncovered

– An average of €1.2 million was being lost every month to over-payments of PUP between March 2020 and July 2021

The problem with PUP review process

Examining how this occurred and how welfare and PUP fraud is being tracked in the Republic of Ireland,  a picture of a manual process involving a large team to cover the quantity of claims and documents is revealed.

Since the implementation of PUP, more than 20 Gardai have been investigating fraudulent claims reported. Claims are being verified and tested against public records, bank statement and more documentations to verify individuals are who they say they are alongside “desk-based assessments.”

A spokesperson from the Department of Social Protection stated,

“The Department runs post payment checks that includes verifying data against Revenue records, examining cases where the same Bank account is used multiple times, examining cases where an employer or members of the public report concerns, and the use of data analytics to identify and check claims. It also undertakes employer inspections.”

Play fraud at the data game

How could things have been done differently to save time, money and resources between March 2020 and now?

One key takeaway from our analysis is to understand that the only way to fight fraud and financial crime is by using the same technology that fraudulent actors are manipulating consumers and businesses with, against them.

Integration of a comprehensive data-driven solution relying on machine learning, AI and biometrics to carry the burden of verifying documents and identities means that within seconds documents are scanned and checked against databases and analysed to produce more accurate, faster results than human review.

A digital Identity Verification solution can save not only money, but also save staffing resources assigned to the manual verification of claims after fraud is suspected. In fact,  such a system can stop fraud before it starts – verifying an identity, document or address in real time and answering the three simple questions.

 


(Source: ID-Pal)

With a digital ID&V solution, claims can be approved for everyone entitled to the payment based on the validity of the documents submitted.

The possibility of a fraudster using a fake identity or falsified documents to forge a payment would have dropped dramatically or best of all, these bad actors would never have entered the system.

It takes less than one minute for a user to download the ID-Pal app, upload the documents, and verify their submission. This biometric-driven digital process could have saved time and money that could have been directed to other priorities.

The Future of PUP

Looking back, the fight to detect and prevent fraud and identity theft is ever-present and advancing at a pace that is faster than legacy systems can keep up with.

Only by seeing the financial loss accrued and resources dedicated to resolving PUP fraud after it had occurred, can we understand the importance of implementing a multi-layered identity defence at the start of a user’s journey with an institution so they don’t enter the ecosystem.

 

The PUP scheme was supposed to end on 25 March 2022 with the last payment on Tuesday, 29 March 2022.  With the introduction in December 2021 of new restrictions following the rise in cases and pressure on the health service, changes were made to PUP and it was reopened to new entrants laid off as a result of the latest Government Covid-19 restrictions from December 8th. The Government will keep the situation under review and future decisions on the closure of PUP will be taken in light of progress in suppressing transmission and the labour market impact of restrictions.

However the activity of bad actors and fraudsters never ends and continues to evolve daily as they shift their focus to new opportunities of vulnerability identified in new institutions across the world.

 

 

 

 


Contact us today for a live demo of how the ID-Pal service can be easily integrated with your business.


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