The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was enacted on March 27, 2020, to provide financial assistance during the pandemic when many people lost their jobs. Many US state agencies saw a surge in unemployment benefits enrollment thanks to the CARES Act, including multiple frauds. Multiple agencies lost over 36 billion dollars to fraudsters filing fraudulent unemployment claims using other people’s names.

The Federal Trade Commission stated that there were 319,423 complaints attributed to COVID-19 stimulus as of January 2021. In addition, 54% of the overall reports are comprised of fraud, while 15% are related to identity theft. With these statistics, Congress included provisions to combat swindlers after rolling out the second COVID-19 stimulus package under the Consolidated Appropriations Act of 2021.

The Act mandates that state agencies verify the eligible applicants’ identity while also providing federal funding to implement the necessary identity proofing measures. Some effective measures include biometric identification and passwordless login solutions to mitigate the risk of both identity theft and fraud.

Many government agencies still use outdated identity verification and authentication solutions, including knowledge-based authentication or KBA solutions. Such measures rely on applicants providing their social security number or SSN, date of birth, tax filing status, and home address, information that criminals can easily compromise and exploit anytime they want.

Using FIDO2 authentication solutions allows government agencies to prove who the applicant claims to be. After identity verification, the agency must validate if the applicants are eligible for the stimulus program. Fraudsters will not be able to easily use other people’s identities since they do not have access to other people’s login credentials.

Government agencies can also stop identity fraud by using automated systems to collect data from multiple trustworthy sources to authenticate an applicant’s eligibility to the stimulus program and using modern data analytics to detect fraudulent data patterns. Using FIDO authentication solutions can help federal and state agencies comply with the Consolidated Appropriations Act of 2021 and combat identity fraud. For more information on stopping identity fraud, see this infographic by

Stop Identity Fraud in Pandemic Unemployment Assistance Benefits | Comply with the CARES Act 2021