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State settles lawsuit over false unemployment fraud claims

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Creative Commons http://michrad.io/1LXrdJM

Michigan's Unemployment Insurance Agency has settled a lawsuit over an automated claims processing system that falsely accused tens of thousands of people of fraud.

Between October 2013 and August 2015, the system kicked out more than 50,000 potential fraud cases. An initial state review of those cases found a 93% error rate. 

A lawsuit filed on behalf of the United Auto Workers union, Sugar Law Center and several individuals accused of fraud was dismissed Thursday under an agreement between the state and the plaintiffs.

Attorney David Blanchard says the agreement includes safeguards to ensure that claimants are notified of fraud accusations and have time to respond.

"Nobody's money should ever be taken out of their account, out of their paycheck, out of their tax returns without first having some basic due process rights, and that's what was happening. That's going to change going forward," Blanchard said.

Wanda Stokes, director of the state Talent Investment Agency, recently apologizedfor the fraud fiasco, saying Gov. Rick Snyder appointed her to "assess the situation and then fix it." 

The state is halting all collection activities against people who were subject to fraud determinations over the nearly two-year period the system was in place. 

Copyright 2017 Michigan Radio

Rebecca Kruth is a reporter interning with Aspen Public Radio over the summer of 2013. Originally from Eaton Rapids, Michigan, Rebecca is thrilled to be spending her summer making radio in the mountains. Though she's always been a public radio fan, Rebecca explored several other career paths including teaching high school English before making her way to the airwaves. During her graduate studies at Michigan State University, Rebecca decided radio was where she needed to be and squeezed some journalism courses into her American Studies degree program. After graduation, she snagged internships on the news desk at WKAR, East Lansing and the arts and culture desk at WBEZ, Chicago. When she's not chasing stories, Rebecca enjoys cycling, photography, listening to This American Life and wandering around the country with her husband, James.
Rebecca Kruth
Rebecca Kruth is the host of Weekend Edition and a reporter at Michigan Radio. She first came to the station in 2014 as a Morning Edition intern. After earning degrees in English and American Studies from Michigan State University, Rebecca began her radio career as a newsroom intern at WKAR in East Lansing. She completed additional news internships at WBEZ Chicago and KAJX Aspen. When she’s not on the airwaves, Rebecca enjoys hiking, Korean food and wandering the country with her husband James. She's also Bruce Springsteen's number one fan.