Computer-Automated Job Fraud Claims Cost Michigan $20 Million

More than 8,000 unemployed Michiganders, incorrectly targeted as fraudsters by a faulty automated-computer system, are inching closer to recovery with a state court’s preliminary approval of a $20 million class action settlement.

The deal, laid out Monday between the Michigan Unemployment Insurance Agency and a class of workers, seeks to end seven years of litigation that began when unemployed Michiganders noticed their tax refunds and wages being taken after a state computer program wrongly identified them as filing fraudulent jobless benefit claims.

Despite the parties’ progress toward recovery, the majority of those wronged by the state—an estimated total of 40,000 ...