WESTMINSTER, Colo — Colin Waters cleared what he thought was the toughest hurdle to get unemployment benefits in Colorado. The state verified his identity and he was approved to receive the benefits.
But the next hurdle came as he chose how he wanted to receive those benefits. The system rejected his bank information for direct deposit.
“This money is supposed to be given to me as the individual to help pay mortgage, child care, everyday expenses,” he said. “And right now, the best way for us to do that is to get it through direct deposit - which doesn't work right now.”
Waters is a victim of a newer bank verification system implemented by the Colorado Department of Labor and Employment (CDLE). The department told Steve On Your Side on Tuesday that it implemented bank verification to reduce the number of fraud holds on benefits that have plagued Colorado’s unemployment system for years following the pandemic.
“CDLE utilizes a bank account verification service provided to many states through a partnership between financial institutions and a third-party validator in order to ensure that the banks used by claimants can be verified as belonging to that individual,” a spokesperson from the department said in a statement to Steve On Your Side.
The problem is the third-party validation system requires financial institutions to opt in. In other words, if your bank doesn’t have a partnership with the company Early Warning, your bank information won’t be verified for direct deposit unemployment benefits.
Waters banks with Credit Union of Colorado. When his account didn’t work, he said he tried to use the information for his wife’s account. That didn’t work either.
“It's been very difficult to actually get a hold of somebody,” he said. “It's usually about a 45 minute wait once you actually get into the queue. And what I found is just kind of inconsistent answers.”
Waters said some call takers tell him they are unsure of what’s going on. Others say they hear from people with the same problem constantly. He looked up the issue online and found others talking about it on social media.
Recently, one person told him to try signing up for a U.S. Bank account. So he did, but that didn’t work either.
“I understand the issues from a verification standpoint. Making sure that you're not trying to fraud the system, that you actually are unemployed,” Waters said. “Those things are the hard part. This should be the easy part, right? Direct deposit is so common. Of course, it should work.”
CDLE told Steve On Your Side the department is working with the Colorado Bankers Association to notify banks about how to get verified to receive benefits.
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