EDD Hardens Its Identity Verification Defenses

The pandemic stress tested all sorts of boundaries for state government, not the least of which were the limits of its critical benefits systems, like those offered through the Employment Development Department (EDD).

In 2020, fraud surged as bad actors — near and far, incarcerated and free — took advantage of the chaos of the moment. Somewhere between $20 billion and $32.6 billion was lost to unemployment insurance fraud in the state between 2020 and 2023, according to a letter from the House of Representatives Committee on Oversight and Accountability to EDD Director Nancy Farias in 2023.

But California’s unemployment system was not the only one in the crosshairs; between $100 billion and $135 billion was lost nationally to this sort of fraud.

The onslaught of fraudulent activity in the state would prompt 2,264 investigations launched, resulting in nearly 1,000 arrests, more than 600 convictions and nearly $6 billion in recovered unemployment funds, according to the department’s website.

Today, the fraudsters and cyber criminals out to steal taxpayer-funded benefits are met with a much harder target, EDD Chief Information Officer Ajit Girn told Industry Insider — California. The department has taken a multifaceted approach to identity verification, most recently implementing Socure technology as part of the myEDD platform.

“Our approach here is a risk-based and defense-in-depth approach ... One solution doesn’t cut it, as we have learned from other industry leaders, and as we collaborate with the other state agencies on how they are doing ID proofing,” he said. “One thing is very clear: You need to have defense in depth.”

The new layer of identity verification does more than just stop ne’er-do-wells from claiming other peoples’ unemployment benefits through identity theft, it also streamlines the process for legitimate claimants as well, Girn explained.

The new Socure functionality allows users to verify their identities through the myEDD portal without having to jump between third-party sites.

Those who struggle through the Socure identification process are pushed to a secondary verification through ID.me, which often includes document and photo uploads and even video chats with a human representative.

“Every solution is catering to a certain need, and the ultimate goal is we can maintain a balance of providing quick benefits to our claimants and still maintain the program integrity using all these tools,” Girn said.

Like the department’s other efforts to serve its diverse range of claimants, Girn said the new tools are built to be as inclusive as possible, meaning the data points used to verify an identity aren’t set in stone. For example, the claimant’s device history and location could be used to check the validity of other data the individual provided to the system.

“It’s a lot of other checks and balances to track the users,” Girn said.

But the system isn’t left to its own devices to deny or approve identities or benefits without human oversight, Girn said, noting that humans are always in the loop, ready to respond to flagged cases quickly.

When asked where industry could fill department needs, Girn doubled down on identity verification, saying that EDD is always interested in hearing about potential solutions that could become an additional checkpoint for users.

“Whatever makes the most sense and provides more options to our customers for ID verification is the way to go,” he said.

The Socure solution was originally piloted to validate IDs for the unemployment insurance system, which makes up the majority of EDD’s programs, but will be gradually expanded into other program areas. Girn hopes to have the technology verifying IDs for other program areas by the end of 2026, if not by the end of the fiscal year.