New York’s Chosen AI Keeps Users From Collecting Unemployment

ID.me hasn’t just confounded users trying to get benefits for the first time — it has also complicated access to existing benefits. During the second summer of the pandemic, some New Yorkers found their benefits suddenly stopped, according to Ciara Farrell, a volunteer attorney with the New York Legal Assistance Group.

The labor department told New York Focus that it has gradually introduced the software. Between February and June of 2021, the office only directed people flagged for fraud or “certain identity flags” to ID.me. Then, until the middle of last July, every claimant was required to go through the service. Now, “only claimants who are flagged for identity issues or flagged for fraud are sent to ID.me.”

After the Internal Revenue Service announced that it would contract with ID.me in November of 2021, the company faced a surge in scrutiny. Privacy experts pointed to concerns about the company’s use of facial recognition, while others pointed to technical issues that the other states using ID.me had already encountered. Federal officials started investigating the company’s claims about stopping fraud.

To quell the backlash, ID.me announced in February 2022 that it would give government partners like states the option to turn off the facial recognition requirement for users and give people the choice to manually verify their identity with human customer service agents. Today, New Yorkers can now verify themselves through self-service, video chat, or in person.

But the company’s human customer service capacity may be limited. The Verge reported last year that agents were overwhelmed, and former employees told Insider that data security at the company was lax. Complaints filed with the FTC and BBB both reflect trouble accessing trustee referees — and customer service issues that stretched into 2022. ID.me has defended its record on wait times since the pandemic, and said that its staffing fluctuates based on “forecasted volume.”

Federal inquiries indicate that it’s not clear how well ID.me’s software actually stops fraud. A report commissioned by the House Oversight Committee — which studied ID.me’s federal contract with the IRS — found that the company had “overstated its capacity to conduct identity verification services.”

Nor is it apparent whether New York measures how well ID.me’s systems actually work. When asked about ID.me’s performance metrics, the labor department told New York Focus to file a public records request; the department was non-responsive when the ACLU filed a request for accuracy information. ID.me said it studies reinstatement rates — instances where its staffers identified fraud, but then conducted subsequent investigations that proved otherwise — but did not share what those rates were.

The comptroller’s office told New York Focus that it has raised the question of performance data to the labor department. Without data, the office said it’s difficult to determine whether people failing to complete the process represented fraudsters who were deterred or genuine applicants who were “discouraged by the process.”

“It’s ludicrous that we trust these companies to self-report data, when they can end up being a bottleneck to services people need in an emergency,” says Albert Fox Cahn, the executive director of the Surveillance Technology Oversight Project. “I don’t think any agency or vendors should be allowed to police themselves when it comes to their performance rate.”

Today, filings suggest that the number of people having issues with ID.me verification for unemployment has declined, in part because fewer people are applying for unemployment. ID.me is planning to open 46 self-service retail kiosk locations, in partnership with identity verification service Sterling Identity, throughout New York.

But problems persist. Some New Yorkers are learning that they now need to use the service to move forward with claims of identity fraud that they filed with the DOL several years ago, Farrell, from NYLAG, told New York Focus.

In April, new federal Department of Labor guidance warned that states must ensure their fraud-prevention tech choices “do not create barriers that prevent or limit access” with discriminatory effects.

And in May, the National Center for Law and Economic Justice filed a Title VI complaint with the federal DOL, pointing to two individuals who had issues with the service. The non-profit is requesting that, among other demands, the federal agency force ID.me to offer far better translation services — or have the New York DOL replace the ID.me with another service. (ID.me called the complaint “deeply flawed.”)

According to Anjana Malhotra, a senior attorney at the National Center for Law and Economic Justice, the state’s labor department has lost sight of individual impact.

“What the Department of Labor in New York State is forgetting about in its kind of zeal to find fraud,” she said, “is the really serious human cost and toll of these private programs that have a vested interest in identifying fraud.”

Update: June 16, 2023 — This story has been updated with a statement from ID.me.