Computer glitch causes state unemployment agency to disclose personal info April 24, 2012 

The state’s Division of Employment Security announced Tuesday that information about thousands of employers and recipients of unemployment benefits were mistakenly disclosed in letters the agency mailed during a three-week period ending April 10.

The agency said a computer program was implemented that generated incorrect employer addresses on letters that included the names of individuals, Social Security numbers, business names and N.C. State Unemployment Tax Act employer account numbers.

“This incident has been reported to the appropriate government and consumer credit reporting agencies, and the Consumer Protection Division of the North Carolina Attorney General’s Office in accordance with legal requirements,” DES Assistant Secretary Dempsey Benton said in a statement. “The Division is committed to working with those affected and making every effort to avoid this type of incident in the future.”

The letters were mailed between March 21 and April 10, when the computer program was fixed. DES said roughly 7,700 customers were affected.

Those people and businesses are now being sent letters that contain information on resources to help identify theft and fraud, including contacts for the N.C. Department of Justice, the Federal Trade Commission and the major consumer reporting agencies. Anyone receiving a letter from DES can contact the agency’s public information office at 919-707-1010.

DES, formerly known as the Employment Security Commission, has been criticized repeatedly for a range of lapses in recent years, many of them information technology-related.

In its 2010 audit, the agency was said to have paid $147 million in benefits out of a wrong account. Auditors also identified more than 4,000 instances in which ESC employees got inappropriate access to its computer systems.

The agency came under withering criticism in fall 2010 after it began recouping overpayments it made to about 38,000 unemployed workers. The $28 million in overpayments was caused by a computer glitch that the ESC failed to correct quickly because it was focused on implementing other benefit programs that affected more people.

The mistake led Gov. Bev Perdue to send a team of IT specialists to evaluate the ESC’s computer system and how it was being used.

The various problems also led Lynn Holmes, the agency’s former leader, to have the IT department report directly to her, instead of to the agency’s chief operating officer – a change that was intended to bring more accountability to the department.

Bracken: 919-829-4548

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