The Vermont Department of Labor disabled its online unemployment claim application because more than 90 percent of the claims filed were flagged as fraudulent, the department announced Friday afternoon.

Earlier this week, state Labor Commissioner Michael Harrington told Seven Days that as many as 70 percent of the claims filed this month were fraudulent. The U.S. Department of Justice has cited a national wave of unprecedented unemployment insurance fraud and has set up a task force to combat it.

Former Vermont governor Howard Dean told Seven Days on Sunday that he had gotten no fewer than 10 booklets for claimants, which the department mails automatically to people who filed for benefits. Dean said he had filed no claim. And even after he reported what was happening, he said, the mailings kept coming. "This is crazy," he said.

The state will continue to accept new claims, but they must come in by phone through the UI Claimant Assistance Center at 877-214-3330. It's open Monday through Saturday, from 8 a.m. to 5:30 p.m.

Harrington said in a press release that forcing people to call to report a claim seemed an effective filter. "When we did this, the number of claims being filed dropped by 90% and so too did the fraud,” the statement quoted him as saying. The department is working on measures to discourage future fraud, it said.

Much of the department's work is processed on a decades-old and largely obsolete mainframe computer that could cost $35 million to replace. But that wouldn't solve the problem, Harrington told Seven Days earlier this week. "The states that have newer systems are still struggling with fraud," he said.
The department urged any residents who have received information about a claim that they haven't filed to report it either by submitting an online fraud report or calling a tip line at 802-828-4104. Employers who receive requests for separation information about an employee who is, in fact, still working should also contact the department, officials urged.