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Colorado labor department blames fraud for 63% spike in new unemployment claims

New claims were unusually high in the week after Christmas -- even though pandemic benefits were no longer available. Fraudsters are now targeting the state’s regular unemployment system.

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In the week after Christmas, claims by newly out-of-work Coloradans reached 41,439 for those on regular unemployment, an increase of 63.4% from the prior week. 

The unusually high number wasn’t blamed on the typical cause for spikes during the pandemic — new COVID-19 restrictions that force businesses to limit operations — but rather on fraudsters who targeted the regular unemployment system.

The state Department of Labor and Employment said Thursday it is “conducting a further detailed analysis on the increase.”

Fraudsters began targeting state systems nationwide last spring when federal benefits began for the self employed, contractors and gig workers who normally don’t pay for unemployment insurance. States quickly implemented the federal Pandemic Unemployment Assistance (PUA) program, where less verification was required since no employers were involved.


But the bulk of attacks last year were on the federal aid — not the regular unemployment system for workers whose employers paid for unemployment insurance.

That changed on Dec. 26, when PUA ended. 

Earlier this week, agency officials said the labor department was getting more reports from employers of current employees who allegedly filed a claim for unemployment. Other victims were reporting that they received unsolicited U.S. Bank ReliaCards in the mail, which is how the state pays unemployment benefits. 

Phil Spesshardt, the Department of Labor’s benefits services manager, said in a call on Tuesday that the labor department discovered fraudsters are using rental and for-sale home listings to get addresses and may be stopping by to steal unopened mail. 

He recommends that property owners check the mailboxes for ReliaCards and report fraud to the state. The state is also adding more anti-fraud controls to the regular unemployment system.

Get a ReliaCard from U.S. Bank in the mail? If you didn’t apply for unemployment benefits, it’s likely a fraudulent claim. Protect your ID by filing a fraud report form with the Colorado Department of Labor and Employment at (Tamara Chuang, The Colorado Sun)

If you’re a victim, the state has a fraud report form to fill out to notify the agency. It also recommends filling out the U.S. Bank form and contacting the bank at 1-855-279-1678 to report the fraudulent card and ask them to deactivate it. And all users should check their credit report with the three credit bureaus. More details are at

Nationwide, new unemployment claims did not see the same spike as Colorado. According to the U.S. Department of Labor, seasonally adjusted new claims declined by 3,000 to 737,000 for the week ended Jan. 2

Colorado ended 2020 with more than 1 million people making a new claim for unemployment. The state also paid out $6.82 billion since March 29, with about two-thirds of the amount funded by the federal government. And in 2019, Colorado saw an average of 1,900 new claims a week, or about 100,000 for the year.

More detailed data is often delayed a week or two. For the first time in weeks, restaurant workers weren’t among the top category of new jobless claims the week ending Dec. 19. Rather the top industries to see new job losses were healthcare and social assistance, education services, construction and then accomodation and food services. The four categories made up 41.2% of all new claims.

For the week ended on Dec. 26, there were 109,373 people still on regular unemployment and collecting benefits. Another 97,585 collected PUA pay while 70,658 had exhausted regular benefits and were receiving Pandemic Emergency Unemployment Compensation, or PEUC, which also ended Dec. 26. 

While those on PUA and PEUC programs are eligible for another 11 more weeks of benefits thanks to the recently passed federal COVID relief package, those have not restarted yet and Department of Labor Executive Director Joe Barela said this week it could still be two to four more weeks before the state reprograms its computer system so folks can request a payment.

The state’s unemployment computer system is currently down as the labor department makes a long-awaited upgrade to modern technology. The system is supposed to be back online on Sunday. The upgrade will allow folks on regular unemployment to request payments weekly instead of every other week.

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