Equifax Inc. EFX has unveiled an unemployment insurance (“UI”) fraud prevention solution for state government agencies last Thursday.

Known as UI Eligibility suite of services, it offers authentication tools and data-based solutions that help in recognizing potentially fraudulent claims at the point of application, verifying self-employed claims under the new Pandemic Unemployment Assistance program, assessing continuing payments for out-of-work individuals and re-evaluating potential fraud.

The procedure is easy to implement, does not require much of technology upgrade and helps accelerate processing of claims  for those who are in actual need.

"After consulting with multiple state government officials, we have been able to align solutions and data sets to help states identify potentially fraudulent applications in order to allow them to process the extraordinary surge in claims efficiently and accurately, getting benefits quickly into the hands of those making valid claims," said Juan Cole, vice president, Equifax Government Solutions.

Notably, shares of Equifax have gained 26.2% over the past year, significantly outperforming the 7.8% rally of the industry it belongs to.

Much Needed Amid a Pandemic

Launch of such a solution makes sense as there has been a significant increase in fraudulent claims amid the coronavirus pandemic, as reported by unemployment agencies. According to the Department of Labor, potential unemployment fraud can cause a loss of at least $26 billion in COVID-19-related unemployment insurance benefits.

Zacks Rank and Stocks to Consider

Equifax currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Business Services sector are Elastic N.V. ESTC, SailPoint Technologies Holdings, Inc. SAIL and DocuSign, Inc. DOCU. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Long-term earnings (three to five years) growth rates for Elastic, SailPoint Technologies and DocuSign are estimated at 26%, 15% and 31.2% respectively.

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