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Colorado tried to weed out unemployment fraud and caught thousands of real claims in the process

The Colorado Department of Labor and Employment said a spike in fraud reports caused it to increase its fraud detection software to the highest possible level.

DENVER — Tony Martinez is stuck in unemployment purgatory. 

He filed for unemployment after losing his tech job in March, started getting benefits and then the money suddenly stopped. 

"It's frustrating because you feel helpless," he said. "This is a legitimate claim. I'm out of work, looking for a job. But there's no help on the other end." 

He couldn't figure out why the state put a program integrity hold on his — or thousands of other Coloradans' — unemployment claims. 

Now we know. 

The Department of Labor and Employment said it ratcheted up its fraud protections to the highest possible level after it saw a spike in fraud reports early this summer. 

The department said data showed widening the net stopped the fraud — with a big drop-off in reports after the last week of June. "This stopped a massive amount of fraudulent payments from being issued," a department spokesperson said. 

Credit: CDLE

Except the wider net caught legitimate claimants like Martinez, too. He said he received his last unemployment check June 24 -- around the same time the enhanced fraud protection took effect. 

"Nine weeks later you start to really feel it and worry. There's a lot of worry going on so..." Martinez said. 

"We understand how frustrating this can be for legitimate claimants who are experiencing delays in payment because of these fraud holds," the spokesperson said. 

"While fraudsters continue to change their tactics, and identities continue to be stolen in major data breaches unrelated to CDLE, the Department continues to review and analyze how it adjusts its fraud triggers to balance catching fraudulent claims while not holding up legitimate ones," the department spokesperson said. 

The department said it has already released 5,000 low-risk claims and planned to release another 4,000 this week. Thousands more remain on hold and under review. 

"Not knowing when you're going to get help is the hardest part," Martinez said. He said he can't wait much longer. His savings account is looking rough and his HOA is about to put a lien on his condo — all while he waits for the state to decide he's real. 

"The process is broken," he said. 

And help can be nearly impossible to find. 

"Unfortunately, when a claimant calls into our call center to inquire about their program integrity hold, our representatives are unable to provide specific details on the claim in order to prevent sharing information to ambitious bad actors, who have called in pretending to be the claimant," the department spokesperson said.

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