FRANKFORT, Ky. (LEX 18) — On Friday, the Kentucky Office of Unemployment Insurance (OUI) announced that it has stopped all claimants from making changes to the bank account information on file with the agency.
The decision was made in an effort to protect unemployment insurance claimants from fraud.
The move comes after OUI was made aware of claimants reporting unauthorized changes to their bank accounts in recent days. OUI said it is verifying these reports and will notify any affected claimants. Due to confidentiality laws, OUI will not comment on the details of how any individual claimant may be affected.
The office said no security breach has occurred to OUI security systems or IT infrastructure related to these reports. Nor is the Commonwealth Office of Technology (“COT”) or OUI aware of any compromise to those systems or infrastructure. Rather, the agency believes these instances are isolated, rather than systemic, instances of fraud, and is the next wave of fraudulent activity hitting UI systems nationwide. In this newest form, the fraudulent activity occurs when criminals exploit unsophisticated PIN numbers (e.g. “1111” or “1234”) created by claimants, used in conjunction with publicly available information obtained from other sources on the Internet. On numerous occasions, OUI has encouraged claimants to generate complex PIN numbers to prevent any unauthorized access. On March 11, Amy Cubbage, the Governor’s General Counsel, spoke about fraud and the importance of creating a strong PIN number during her unemployment insurance update. To address this situation moving forward, OUI will require new and existing claimants to create more complex PIN numbers. In addition, all new UI claimants will only be paid by paper check effective immediately.