Hertel: COA Ruling Unfair to Residents Wrongly Accused of UIA Fraud

Faulty computer program resulted in people losing savings, homes
Tuesday, July 18, 2017

LANSING — State Rep. Kevin Hertel (D-St. Clair Shores) responded to today’s Michigan Court of Appeals ruling against plaintiffs who had been falsely accused of unemployment fraud calling the decision wrong and unfair. The Court of Appeals chose to dismiss the class-action lawsuit against the Michigan Unemployment Insurance Agency citing that the complaint was filed outside the six-month statute of limitations. A previous ruling from the Michigan Court of Claims allowed the case to proceed to trial.

“Anyone who would rely on a technicality to refuse to help people get their lives back after they were falsely accused of fraud by the state does not understand the people of Michigan or our values,” said Hertel, Democratic vice-chair of the House Oversight Committee. “It’s shameful that our attorney general is okay with dodging his responsibility to citizens whose lives have been impacted by the state’s massive error. These people deserve better from their government -- they deserve justice.”

The case centers around an automated computer system the Michigan Unemployment Insurance Agency used to detect fraud. Using the automated system, the agency made approximately 50,000 accusations of unemployment fraud against 40,000 Michigan workers. So far, 93% of accusations have been found to be false. Before later acknowledging the false fraud accusations, the Unemployment Insurance Agency seized assets, including income tax returns, from the accused to repay the “fraudulent unemployment payments.” Many of those individuals were forced into bankruptcy, losing savings and losing homes to foreclosure.