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Ohio unemployment office hamstrung on account hacks, stolen benefits

How long will claimants have to wait before they get their money back? ODJFS isn’t saying.
Published: Jul. 8, 2021 at 7:26 PM EDT
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CINCINNATI (WXIX) - More than a week after news broke of hacks that robbed countless Ohioans of unemployment benefits, there remains no clear process or timetable for reporting the thefts.

The “account takeover” hacks surfaced at the end of June.

Hackers gained access to claimants’ unemployment accounts and changed their bank routing numbers. When Ohio Jobs and Family Services paid out the benefits, they went to the criminals’ bank accounts.

The claimants were left locked out of their accounts. They called ODJFS and were told they could verify their identity to regain account access (a process that takes two months) or call the FBI.

Interim ODJFS Director Matt Damschroder responded to questions about the account hacks on Thursday.

“We have to operate under a framework that’s established by the Department of Labor,” he said, “and that framework requires us to have an adjudication process—to have a finding of fact, essentially—that the person was a victim of identity theft before we can make a duplicate payment.”

What is that framework? When will claimants affected by the hacks have access to it? How long will it take to work?

Damschroder gave specific answers to none of those questions, leaving Tri-State victims like Lawrence Walker, Tori Gessner and Jeff Ingle—not to mention 20 laid-off workers at an engine plant in Lima—without hope of getting the money they’re owed anytime soon.

That doesn’t sit right with State Sen. Teresa Fedor (D-Toledo,) who spent last week grilling ODJFS about the issue.

Fedor says she wants those victims paid now and she sees no reason ODJFS can’t go directly to the banks to which the benefits were rerouted and recoup them.

“It wasn’t stolen from the Ohioans, because they never got it,” she said of the missing benefits. “It was stolen from the system. And ODJFS is saying, ‘It’s not our fault, we didn’t do it, we’re not paying double.’ And do they have access to the bank account information where the money was fraudulently deposited? Yes, they do.”

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The account takeover issue is one of several issues plaguing the Ohio unemployment system.

Since the beginning of the pandemic, ODJFS has paid out more than $2.1 billion either to fraudsters or to claimants in overpaid benefits. So far, just 7 percent—$150 million—of that total has been recovered.

Many claimants balked when the agency asked for those overpaid benefits back earlier this year. But on Thursday, Damschroder announced those claimants can file a waiver to keep the money.

Claimants will be asked to provide documentation showing the overpayment was due to an employer or government error.

Damschroder expects the system to be up and running within days of the announcement and for the review process to begin in August.

The unemployment system has run up quite a tab in the last year as well.

According to documents obtained by FOX19 NOW, the state of Ohio has paid more than $89 million to contractors and businesses to prop up the system as it dealt with ongoing issues during the pandemic.

Those payments ran from March 2020-June 2021 and came mostly from federal dollars, according to ODJFS spokesperson Tom Betti.

“The pandemic resulted in unprecedented levels of hardship for many Ohioans, and we were faced with extraordinary challenges in meeting those needs,” Betti said in a statement Thursday night. “In addition to relying on our employees stepping up to the challenge, our ability to quickly bring on experienced vendors allowed us to adapt to these challenges and distribute more than $22 billion in unemployment compensation payments to over 2.2 million Ohioans in need.”

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