Thousands of Michigan Residents to Get $1,600 Checks After Being Accused of UI Fraud

About 3,000 Michigan residents wrongly accused of fraud by the Michigan Unemployment Insurance Agency will likely get settlement checks from the state.

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Computers at the Root of the Problem

The lawsuit was filed in 2015 after about 40,000 Michigan residents were wrongly accused of unemployment fraud. Over a two-year period, those individuals were wrongly accused of fraud by a computer system administered by the state of Michigan, but run without supervision.

The computer system had an error rate of about 93%, according to a report published by the Detroit Free Press.

Class Action Suit Against the State of Michigan

The law firm of Pitt, McGehee, Palmer, Bonanni, and Rivers administered the suit, contacting about 8,000 residents who had been wrongly accused.

The publication reports that 3,206 of those claimants are posed to receive a portion of the $20 million settlement that was approved last year. A judge is expected to grant final approval of the deal later this month.

Why Are Some Claimants Not Included in the Settlement?

A partner with the law firm clarified that no all of the 40,000  claimants were included in the suit because the Michigan Supreme Court limited who could participate "based on the timing of when the harm was done."

Some of the most egregious accusations were made against victims who were subjected to quadruple penalties and subjected to extremely aggressive collection techniques such as wage garnishments of and income tax refund seizure.