Vermont unemployment claims process sees fraud drop after returning to phone claims

The House Commerce meeting held on May 6, 2025, focused on the challenges and changes in Vermont's unemployment claims process, particularly in light of experiences during the COVID-19 pandemic.

The discussion began with an overview of the claims filing process. It was noted that anyone displaced from their employment has the right to file a claim, although eligibility is determined by the state. Prior to the pandemic, claims were exclusively accepted over the phone, requiring individuals to open an initial claim and subsequently file weekly claims to receive benefits.

During the pandemic, Vermont transitioned to an online claims system, which led to a significant increase in fraudulent claims. At the peak, the state was processing approximately 2,500 claims daily, with a staggering 90% identified as fraudulent. In response to this surge, the state reverted to accepting claims over the phone, resulting in a dramatic decrease in fraud rates to around 10%.

The meeting highlighted a key takeaway: fraudsters tend to avoid direct interaction with individuals, which Vermont's low-tech approach inadvertently capitalized on. The discussion also addressed operational challenges, noting that the automated system previously used to process claims had become outdated, leading to longer processing times. Currently, it takes about 25 minutes to file a claim, compared to the previous 12 minutes.

The representatives emphasized the need for a new system to streamline the claims process and improve efficiency. They acknowledged that the transition back to manual processes had increased call center wait times, impacting service delivery.

In conclusion, the meeting underscored the lessons learned from the pandemic regarding fraud prevention and the necessity for technological upgrades in the unemployment claims system to better serve Vermonters in the future.