Federal Employees’ Victim of Flexible Spending Account Scam
Office of Personnel Management (OPM) acknowledged to all Shared Service Providers on May 20, 2024, that unauthorized individuals have accessed federal employees’ data outside both IBC and NFC payroll systems. Employees’ personal information was used to create unauthorized health care flexible spending account (HCFSA) and dependent care flexible spending account (DCFSA) enrollments that led to unauthorized deductions from employees’ pay. OPM has stated the fraud exceeds one million dollars and to date, this issue is not resolved.
Growing frustration over the lack of information from OPM forged an alliance between two Treasury agencies seeking answers. ARC/HROD joined forces with IRS HR Shared Services to gain an understanding of this fraud and get answers for our customers.
HROD scheduled a meeting with OPM, NFC representatives, and IRS to discuss a plan of action and share our concerns. During the meeting, it was discovered that NFC was not processing new or changes to FSAFEDS accounts despite agency validation. OPM was unaware of the siloed approach being taken and requested to be included on validation responses.
Ongoing data feed verification is taking place each pay period and newly created fraudulent accounts are dwindling. HROD’s collaboration with other federal agencies is helping stop the scammers from stealing more funds from federal employees.
The OPM Office of the Inspector General (OIG) is aware of the fraud the Federal Flexible Spending Accounts (FSAFEDS) has experienced and is working with the Federal Bureau of Investigation (FBI) on this investigation.
OPM and FSAFEDS states there is no evidence that their systems are compromised in any way. Out of an abundance of caution, OPM has directed the functionality of the FSAFEDS enrollment platform be temporarily disabled.
Employees are encouraged to review their Earnings and Leave Statements in Employee Personal Page (EPP) each pay period. Access statements by going to Employee Personal Page, click “Personal Info” on the left side of the screen and click “E&L Statements”.