Recoding America: Why Government Is Failing in the Digital Age and How We Can Do Better

by Jennifer Pahlka

That number could be reduced if the EDD loosened the criteria that were flagging claims for manual processing, but Paula wouldn’t hear of relaxing what she thought of as fraud prevention practices. Those practices were not, in fact, preventing fraud. As proof, Marina’s team took claims that had been flagged for further identity verification during the previous quarter and looked at what the EDD had decided to do with them after its manual review. Out of 183,167 claims, only 804 were judged to be imposters. And even among those 804, many of them were likely to be not actually fraudulent. People whose claims are denied can appeal to the California Unemployment Insurance Appeals Board, and the board overturns the EDD’s identity verification decisions around half the time.5 So the real rate of fraud among the flagged applications that quarter was probably just a few hundred people out of almost 200,000. In other words, only about 0.2 percent of applicants who were flagged for identity verification turned out to be committing fraud.