Automated public-benefit fraud detection used by states subject of new FTC complaint
Summary
An automated system used by several state agencies to detect public benefits fraud is the subject of a complaint that the Electronic Privacy Information Center, or EPIC, filed Tuesday with the Federal Trade Commission. The complaint alleges the software uses sensitive personal data to power an algorithm that alert benefits administrators of potentially fraudulent activity and contains an “opaque, proprietary algorithm.” EPIC also claimed the adoption of the Thomson Reuters tool by government agencies has led to millions of legitimate claimants going without access to public benefits. EPIC also claimed that Thomson Reuters is in violation of Section 5 of the FTC Act because it has engaged in unfair and deceptive trade practices, both directly and indirectly. In its complaint, EPIC urged the FTC to open an investigation, secure an injunction and seek model deletion or destruction of the system. The filing comes just days after the FTC banned the drugstore chain Rite Aid from using AI facial recognition systems.