The new report is part of a broader federal government campaign in recent years to root out improper payments. As a result of the new effort, billions of dollars in government payments affected by fraud have been tabulated in recent years, the report said. Looking back, the report noted that estimated improper payments from fiscal year 2003 through 2021 amounted to $2.2 trillion, or about $7,000 for every U.S. citizen over that period.

The JFMIP report is part of a broader, ongoing initiative begun in October 2020 and will eventually feed key considerations and empirical data to an expected executive order from President Joe Biden calibrated to curtail identity theft in federal government benefits programs. In March, the White House announced it would implement the order this year to combat fraud particularly in pandemic relief programs.

“Federal agencies and oversight bodies have recently taken steps to determine the significance of misrepresented identity as a cause of improper payments and have begun to focus on identity verification as a means to improve payment integrity,” the report said.

A large share of the improper payments are to individuals who must meet certain eligibility requirements, the report said. Some strategies for preventing the fraud explored in the report include examining applicants’ digital footprints, reviewing bank account information, checking physical or email addresses and using biometric identification.

In 2020, another federal agency group determined that the government wasn’t doing enough to track identity theft in those improper payments and, as a result, the OMB called on agencies to tally that particular payment fraud. In 2021, it found about $7.7 billion in the faulty payments were due to problems with identity verification.

“Some agencies are still in the beginning phases of determining whether misrepresented identity is a significant cause of improper payments and the total impact of misrepresented identity is still largely unknown,” the report said. 

The report repeatedly warns of pitfalls if the government resorts to identification methods that present undue burdens for “socioeconomically vulnerable” people. The broader initiative under Biden’s direction seeks to cut the improper payments while also “protecting privacy and civil liberties and preventing bias,” the report said.

By Lynne Marek on July 20, 2022
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