Rick and Kim Crouse stand outside their home Saturday in Palermo. Because of a mix-up with the state’s unemployment system, their bank account was mistakenly frozen for eight days. Joe Phelan/Kennebec Journal Buy this Photo

PALERMO — For eight long days, all Kim and Richard Crouse had was the $20 in Kim’s purse.

Due to an unemployment claim mix-up, a freeze was put on their joint account at the KeyBank branch in Waterville. After more than a week of days of stress and confusion, the freeze was finally lifted Thursday afternoon.

They still wonder what happened.

“It’s just balled into this huge logistics mess on top of still going to work everyday,” Kim Crouse, 49, said Thursday. “It’s been a disaster.”

The complications for the Crouses come after broader complaints about the state’s unemployment claims system in recent years, which has also seen an influx of fraudulent claims during the pandemic. A Morning Sentinel inquiry into the Crouse case has revealed a shortcoming of the state’s unemployment claim review system: There weren’t enough department staff to manually review the surge in claims that came last spring as businesses closed down or laid off workers.

The result was that a handwritten note by Crouse’s employer could not be read by the Maine Department of Labor’s claims system, which ultimately resulted in the bank account freeze some eight months later. A department official, though, said that oversight has since been addressed with a new review process in place.


There have been issues with the state’s unemployment system that launched in December 2017. Complaints about the system dominated headlines in early 2018, while early in the pandemic, “serious problems” arose with the system as the unemployment rate across the state ticked up.

Kim Crouse said she wonders how many other Mainers have been affected by similar claims problems, which resulted in her primary bank account suddenly becoming frozen with no prior notice.

“How can they just freeze someone’s whole life without any prior notification?” Crouse said. “It’s been a nightmare. An absolute nightmare.”

Kim Crouse is employed by the Huhtamaki manufacturing facility in Waterville. She was laid off during the early days of the coronavirus pandemic last year, from March 20 to April 14. Huhtamaki did not respond to a form sent by the Maine Department of Labor about Kim’s unemployment claim until June, after she had already returned to work there. The state form was sent soon after Crouse filed for unemployment.

Because she was already back at work, Huhtamaki checked off the box saying she was working full-time, not currently unemployed. In the comment section of the form, Huhtamaki did write that Kim had been temporarily laid off.

“But unfortunately the system cannot read text,” the Maine Department of Labor official wrote in response to a Morning Sentinel inquiry. “Due to high claim volume, we did not have staff manually reviewing the comment section at that point in time.”


By late April last year, about 108,500 Mainers had filed for jobless benefits in the previous six weeks, which was more than one of every seven workers in the state.

The labor official wrote that the system mishap occurred over the summer of 2020, “but we have recently launched a robust process for recovering fraudulent unemployment payments, which is why Ms. Crouse would be seeing it now.”

“We recently turned off the automated process that canceled some claims based off of their employer’s responses, and instead have put in place an alternative automated process that will still hold the claims, but it is a temporary hold that gives the claimant a chance to provide proof of their identity before action is taken with our financial institution,” the official wrote. “The Department’s examination into this has so far revealed a very small number of people being affected.”

Crouse said she knew something was up with her bank account on Wednesday, Feb. 17. Multiple transactions on her KeyBank debit card were denied. The Waterville branch of KeyBank told Crouse that her account was suddenly frozen due to unspecified claims of unemployment fraud.

She went on unemployment last March and collected four unemployment deposits before getting back to work. Crouse was unemployed from March 20 to April 14, but only started getting money in the form of retroactive deposits in May.

“Unfortunately, Kim Crouse’s unemployment account was … shared with the Department’s financial institution for suspected unemployment fraud, which led to the bank freezing the account in order to recover unemployment funds,” a Maine Department of Labor official wrote to the Sentinel, after receiving permission from Crouse to discuss her case. “We are committed to making sure that fraud is prevented while ensuring that legitimate claimants receive benefits.”


But for the week following when the bank account freeze began, Crouse’s calls and transfers went in a looping cycle, with KeyBank and the Department of Labor pointing fingers at each other, she said. She was advised to call U.S. Bank, the institution the state of Maine uses to distribute unemployment checks.

After “fighting her way through the calling tree,” U.S. Bank staff said they could not service her and had no records of any deposits, Crouse said.  She and her husband, 49-year-old Richard Crouse, share the KeyBank account. Crouse said she could not access her paycheck from Huhtamaki. His Pan Am Railways check was inaccessible. In fact, both checks were bounced back to their respective companies.

They opened a new joint account at Maine State Credit Union in Waterville and got this past week’s checks. In the meantime, the Crouse’s bills went unpaid. They caught up as of Thursday, but had to pay late fees.

They have been KeyBank customers for more an 30 years, having done their mortgage, home equity and car loans with the bank.

“That’s our bank, and their hands were tied,” she said.

On Monday, the Maine Department of Labor told Crouse that the account was frozen because they never received verification of her identification. She said she had faxed copies of her identification when she originally became unemployed March 20.


“They put deposits in my account for the time I was off,” Crouse said. “It was all legit. There was no fraud. I was entitled to that unemployment.”

Richard Crouse got a phone call around 1 p.m. Wednesday from KeyBank saying they could override the state’s hold on the account. He couldn’t get to the bank until the following afternoon.

Even now, the Crouses say there continues to be confusion among state and bank officials.

“There’s still a pending investigation, and they overrode the state’s hold on our account so it allowed us to take the money out,” Richard Crouse said. “They told me when I went in the office, ‘This is the decent thing to do. This is the right thing to do.'”

Richard Crouse said he was told three other clients at the Waterville branch experienced the same issue.

“The state still thinks there’s a hold on (the account); KeyBank’s just overridden it,” Richard Crouse said. “As of right now, the state does not even know KeyBank overrode it. We still need to figure out how the state put a hold (on the account), even though it’s something they said they can’t do.”

The Department of Labor said anyone in a similar situation who has not already contacted the department should contact them by emailing UIFraud.DOL@maine.gov with the subject line “Bank Account Issue.”



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