Identity verification contractor fires dozens of fraud teams as Congress investigates


OAKLAND, California, April 26 (Reuters) – A major U.S. government contractor specializing in identity verification technology, which is under investigation by Congress, laid off 39 employees over the past week for inappropriate communications, the company told Reuters.

The company,, has gutted about half of its fraud review team, but said the layoffs were unrelated to an investigation US lawmakers opened last week into “serious concerns”. regarding the effectiveness, privacy and security of its technology, including facial recognition. Read more

About two dozen U.S. states and 10 federal agencies, including the Internal Revenue Service (IRS), contract with to catch scammers trying to siphon off benefits like unemployment insurance and job refunds. taxes using fake or stolen identities. Read more

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Processing times have been a major challenge for the Tysons, Va. startup during the coronavirus pandemic, and US lawmakers said this month that “delays have blocked access to essential government services and benefits.” . said some customer support staff had been fired from the company “for inappropriate internal communications” that showed a lack of respect for colleagues and would add training and procedures.

Five fired employees told Reuters the fraud team shared jokes, sought advice and discussed frustrations during an internal messaging group chat. For example, workers displayed a rat emoji to alert co-workers when managers were approaching patrols for personal cellphone use or other safety violations, two people said.

The job cuts affect about half of a 70-person team that reviews users locked out due to suspected fraud or other issues, workers said. The sources, speaking anonymously, said their exit from left their remaining colleagues with significantly higher workloads which they said would slow response times. told Reuters the cuts would not significantly affect operations as it transferred other workers to the fraud division and the workload decreased after the deadline for filing tax returns with the United States in mid-April.

The company, which employs about 1,400 people, was valued at $1.5 billion in a fundraising round last year by Alphabet Inc CapitalG and other funds.

While some clients praise its work,’s use of facial recognition software to verify people, along with other issues, has led to a public campaign by rights activists urging the government to to give up. said it stopped fraud in an unprecedented way.

The fired employees said they feared first issued warnings. He offered the laid-off workers one month’s pay and three months’ health care if they agree not to pursue legal action or talk about the deal, according to a severance agreement seen by Reuters. said it has no tolerance for disrespectful discussions, but declined to comment on the package.

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Reporting by Paresh Dave; Editing by Howard Goller

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