Major Breakthrough in the Fight Against Unemployment “Robo-Fraud” Determinations as State Announces Plans to Review Old Determinations.

Major Breakthrough in the Fight Against Unemployment “Robo-Fraud” Determinations as State Announces Plans to Review Old Determinations.

Since at least 2013, the Michigan’s Unemployment Insurance System has had its computers set on data-mining old claims data, sometimes going back up to six years, to find data discrepancies and automatically issue “Robo-Fraud” determinations against unemployment claimants.

Now, just more than a year after we filed the federal court lawsuit challenging the constitutionality of the state’s unemployment fraud accusations, the UIA is showing the first signs of a break under mounting pressure from multiple quartersHouse Testimony.  In April, the federal judge hearing the constitutional challenge issued an Order denying the State’s motion to dismiss and clearing the way for the case to move forward. Meanwhile in Lansing, Reforms to the State System are being contemplated in the Michigan Legislature, where attorney David Blanchard testified last week on the impact of the system for Michigan UIA claimants and on the need to strengthen protections.

Last week saw another major development as U.S. House Representative Sander Levin has taken the Agency on directly – in letters to Governor Snyder and to the UIA demanding a review. Now, in an MLive article reported Friday, the State’s Unemployment Insurance Agency is quoted as saying they are working on a plan to reach back  to review all the robo-fraud determinations, even those over a year old.

Up to fifty thousand residents have been swept up in the system – many facing wage or tax garnishments or forced make monthly payment plans to pay back up to five times the original amount of benefits collected. Some restitution notices have sought over $100,000 in repayment from the state’s current or formerly unemployed.  Only about seven percent of these determinations ever got appealed, according Agency statements.  No doubt because the UIA’s baseless robo-determinations were paired with an antiquated and ineffective notice system that often failed to provide notice of the accusations – as outlined in a scathing Auditor General Report issued in April.

First the UIA claimed that it had done nothing wrong, then it claimed that it had no power to review determinations going back more than a year – no matter how defective.  Now there is finally hope for tens of thousands of Michigan residents swept up in the system.  A spokesperson for the UIA reportedly announced Friday that its review effort “is being expanded after getting an OK from the federal government to proceed with reviewing cases going back more than a year.”  The announcement gives hope but also leaves many unanswered questions.

At Blanchard & Walker PLLC hardly a day goes by where we don’t get a call from a new victim of robo-fraud.  We continue to handle our own backlog of robo-fraud cases – representing individual claimants and moving one at a time to reopen cases for new hearings.   At least so far, we aren’t seeing any sign that the abusive collection practices and baseless assumptions of fraud have ceased.  Moreover, the Agency has yet to clarify how far back its review will go, or whether it will issue new determinations and provide new opportunities to appeal for claimants who disagree with its determinations.   We will continue to closely monitor the rapid developments, and fight for those wrongfully accused – in the legislature, in the courts, and in the UIA system.