Thousands of state Unemployment claims remain locked by DWS

LITTLE ROCK — When Rebecca Towne was laid off April 15 from her job as a tax preparer for Jackson Hewitt, she figured she would find another job.

Like many Arkansans, she’d never drawn unemployment in her life and didn’t plan to start then.

But Towne, 51, couldn’t find work anywhere in Marion County that spring, as businesses closed their doors and laid off workers in response to the coronavirus pandemic. By July, she was borrowing money from her adult daughter to feed herself and her youngest daughter. She filed for Pandemic Unemployment Assistance, or PUA, the first week of July. Towne said she was told she would be able to backdate her claims going back to April 16, meaning she’d get $600 from the federal government and a maximum of $132 from the state for each week she was without work.

As of October, Towne had received a grand total of just $780 in benefits, for two weeks in August. (By that point, the weekly federal bonus payments had decreased from $600 to $300.) Her claims for April, May, June and July were denied by the Arkansas Division of Workforce Services. After repeated phone calls, she’s still unsure why.

“You guys say I qualify, you say I’m going to be able to get help, and then you deny everything,” Towne said in a phone interview.

In August, she resumed working as a paraprofessional at a nearby school, and she now brings home under $1,100 monthly from the job – not enough to cover rent, bills and groceries.

As of Oct. 13, DWS had received almost 238,000 applications for PUA, the program established by the federal government this spring to assist independent contractors, gig workers, the self-employed and others who lost work due to the COVID-19 crisis.

Many such workers do not qualify for regular unemployment insurance, which is designed for workers classified as employees.

The PUA program, which was created by Congress as part of the CARES Act, has provided an economic lifeline for tens of thousands of households in Arkansas.

Yet over 54,000 of those PUA claims had been flagged for internal review by Arkansas DWS as of Oct. 13, according to spokeswoman Zoë Calkins. That number is almost a quarter of the total, and twice as many as the agency said were under review on Aug. 4. A flagged claim remains frozen until the review is complete, which can leave applicants in limbo for weeks or months.

DWS has had to develop new processes and policies to investigate suspected fraud in the PUA system, Calkins said. The regular unemployment insurance system is funded largely by payroll taxes collected from employers, so workforce services agencies usually turn to employers for help when investigating suspected fraud. In contrast, a PUA claim filed by an independent contractor or self-employed person does not involve an employer. A PUA applicant must self-certify that he or she lost work due to the pandemic and provide proof of income, such as last year’s tax return and recent invoices.

Calkins said DWS began using “algorithms” over the summer to help identify suspicious PUA claims that require further investigation. But she declined to provide details about where the algorithms originated, saying only that they were developed through “a combined effort coordinated across internal and external entities.”

Calkins said in an email that DWS does not keep track of how many flagged claims have been confirmed to be fraudulent or how many have been cleared and released since the program began in May.

When asked what type of situations might result in a claim being flagged, Calkins said the agency is “not sharing this information for security purposes.” Arkansas’s experience with PUA has been troubled from the beginning. The state was slower to roll out the program than many others, in part because its computer system for processing regular unemployment claims lacked the capacity to handle the new program. It hired a vendor, Protech Solutions of Little Rock, to build a new system for PUA from scratch in April.

Arkansans started filing PUA claims on May 1, but a glitch caused some 5,700 applicants’ documents to be

Continued on Page 11 STATE NEWS (cont.)

lost the first week the system was online. Then, on May 15, the Arkansas Times published a story calling attention to a security flaw in the new web portal that left thousands of applicants’ personal information exposed, including Social Security numbers and bank account numbers.

The Times was notified of the vulnerability by an outof- work software programmer who was applying for assistance. DWS was forced to take the website offline for several days to repair the problem.

Protech Solutions is now the subject of a class action lawsuit by PUA applicants who say the company’s negligence exposed them to possible identity theft and delayed their receipt of benefits. A DWS official told the state legislature in September it had found no evidence of fraud connected to the incident, though an FBI investigation is ongoing.

But identity theft has now become a problem for PUA systems across the country, with scammers submitting millions of applications using others’ personal information. California was so overwhelmed with fraudulent claims that it recently stopped accepting new applications for two weeks. In Arkansas, Governor Hutchinson received a letter this summer notifying him he had applied for assistance, as did Rep. Fred Love (DLittle Rock), the minority leader in the state House of Representatives.

As DWS attempts to weed out fake claims, however, thousands of real Arkansans have been left stranded.

Bryce Youngblood, 26, of Horatio, said he typically made $1,400 a week on contract as an industrial welder before the pandemic began. The company he worked for shut its doors in March, he said, but soon after he applied for PUA, his account was placed under review by DWS.

After months of making calls and leaving unreturned messages, Youngblood said, he has gotten no help from the state. He’s had to sell his truck and move in with his brother while he scrapes by on odd jobs.

“I still have yet to receive anything,” he said in a phone interview. “And I have already lost every single thing I had.”

Robyn Socarro, 47, runs a dog-walking service in Benton County and lives just across the state line in Pineville, Mo. Her business plummeted in March and April as her clients began working from home, cutting back on expenses and taking safety precautions.

In those early months of the pandemic, it was unclear whether dogs could spread the novel coronavirus. (Canine infections are now thought to be extremely rare.) Socarro applied for PUA in May and initially received several weeks of backdated payments. But in mid-June, the money stopped without explanation and her PUA account was locked for review. For the next three weeks, she said, she called DWS almost daily in search of answers.

“There were thousands of people, and it was just, poof, too bad for you, we’re not telling you squat. Y’all figure out for yourself how you’re gonna live. I can understand having some problems, but I don’t understand their lack of communication.”

By mid-July, she’d given up on PUA and was piecing together cleaning and dog-sitting gigs as best she could. Then, unexpectedly, Socarro received a call from a woman at DWS who demanded to know why she’d applied for unemployment in Arkansas when she lived in Missouri. Socarro explained that she earned all of her income in Arkansas and filed her taxes in Arkansas. In fact, she said, she initially tried to apply for unemployment in Missouri but the state’s workforce services system had steered her to the Arkansas system instead.

The DWS worker accepted the explanation – but did not unlock her account.

Instead, Socarro said, she was told to wait for another call. Another month passed before she received an email asking for her previous year’s tax return and other financial information, which she provided. At last, a letter arrived from DWS telling her to show up in person at a workforce services office and verify her identity.

In September, Socarro finally received her PUA money for June. It all went toward paying off the credit card debt she accrued while she was out of work, she said. She’s now working a janitorial job and is trying to rebuild her dogwalking business. Though she thinks she’s still owed partial payments for July, she’s not going to press the issue.

“Just forget it. I can just eat more beans right now,” she said. “And I’m one of the lucky ones.” She knows many people, she said, who abandoned their claims after endless hours of trying and failing to reach anyone at DWS. STATE NEWS (cont.)

Arkansas joins DOJ, 10 other states in filing complaint against company to restore competition in search and advertising markets

Arkansas Attorney General’s Office LITTLE ROCK — Arkansas Attorney General Leslie Rutledge today announced filing a civil antitrust lawsuit jointly with the U.S. Department of Justice and ten state attorneys general in the U.S. District Court for the District of Columbia to prevent Google from unlawfully maintaining monopolies through anticompetitive and exclusionary practices in the search and search advertising markets.

“Most Americans think it is free to ‘Google’ something, but it comes at a cost and that cost is the freedom to choose the best products from the best companies,” said Attorney General Rutledge. “As Attorney General, I am charged with the responsibility of protecting the citizens of our state and while I want businesses to thrive, I will do everything in my power to protect consumers from deceptive and unfair practices.”

As alleged in the complaint, Google, being one of the wealthiest and most powerful companies on the planet with a market value of $1 trillion, entered into a series of exclusionary agreements to lock up the primary avenues through which users access search engines, and thus the internet. By requiring that Google be set as the default

Continued on Page 15

Attorney General Leslie Rutledge ARKANSAS STATE (cont.)

or exclusive search engine on billions of mobile devices and computers worldwide, Google solidified its lead as the primary search engine in the United States, accounting for almost 90 percent of all search queries. In particular, the complaint alleges that Google has unlawfully maintained monopolies in search and search advertising by:

• Entering into exclusivity agreements that forbid preinstallation of any competing search service.

• Entering into tying and other arrangements that force preinstallation of its search applications in prime locations on mobile devices and make them undeletable, regardless of consumer preference.

• Entering into long-term agreements with Apple that require Google to be the default – and de facto exclusive – general search engine on Apple’s popular Safari browser and other Apple search tools.

• Generally using monopoly profits to buy preferential treatment for its search engine on devices, web browsers, and other search access points, creating a continuous and self-reinforcing cycle of monopolization.

These and other anticompetitive practices harm competition and consumers, reducing the ability of innovative new companies to develop, compete and discipline Google’s behavior.

By restricting competition in search, Google’s conduct has harmed consumers by reducing the quality of search (including on dimensions such as privacy, data protection and use of consumer data), lessening choice in search, and impeding innovation. By suppressing competition in advertising, Google has the power to charge advertisers more than it could in a competitive market and to reduce the quality of the services it provides them.

Through filing the lawsuit, Arkansas seeks to stop Google’s anticompetitive conduct and restore competition for American consumers, advertisers and all companies now reliant on the internet economy.

In addition to Rutledge and the Department of Justice, the other participating state Attorneys General offices represent Florida, Georgia, Kentucky, Indiana, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas.

Leslie Carol Rutledge is the 56th Attorney General of Arkansas. She is the first woman and first Republican in Arkansas history to be elected as Attorney General. Since taking office, she has significantly increased the number of arrests and convictions against online predators who exploit children and con artists who steal taxpayer money through Social Security Disability and Medicaid fraud.