Unemployment has skyrocketed over the last year due to the COVID-19 pandemic. Many states have been inundated with unemployment benefits claims and have been struggling to keep up with the backlog of cases. In addition, states are feeling the pressure to deliver these important benefits as fast as possible since people are truly in dire need. This situation has created a unique opportunity for scammers to steal millions of dollars through unemployment fraud.
Thousands of people across the country have reported fraudulent unemployment claims made in their name. Often, these fraudulent claims are made possible by identity theft and as a result, the victims may face a variety of issues beyond unemployment fraud.
Signs that You may Be a Victim of Unemployment Fraud and Identity Theft
As with other instances of identity theft, you may not become aware of the problem until long after your personal data has been compromised. According to the FBI, many people don’t know they’ve been the victim of unemployment benefits fraud until they either file a legitimate claim of their own or start preparing their taxes.
Some signs that you’ve been the victim of unemployment benefits fraud include:
Your legitimate unemployment claim is rejected because your benefits have been “maxed out”
Your employer has been notified that you’ve been receiving unemployment benefits
You receive a request for information from your state unemployment office even though you’ve never filed a claim
You’re denied a loan based on your employment status
You receive a letter from the IRS saying you’ve underreported the unemployment benefits you’ve received
Impact of Unemployment Fraud on Victims
The Federal Trade Commission (FTC) estimates hat over $26 billion dollars in fraudulent unemployment benefits may have been distributed in 2020. Not only will this impact the victims of fraud, but also other individuals who actually need these important benefits right now. Fortunately, you won’t be held responsible for fraudulent unemployment benefits stolen in your name due to identity theft. However, you may have to deal with a complex process to resolve the issue:
Unemployed individuals – If you file for unemployment benefits and find out you’ve been the victim of a fraudulent claim, your unemployment funds will eventually get replaced.
However, your payments may get delayed until the fraud investigation is complete, and this can take anywhere from several weeks to several months.
Employed individuals – You will still have access to your unemployment benefits if you need them in the future. However, you will most likely have to resolve the fraud issues before you’re able to receive your benefits.
Protecting Yourself from Identity Theft and Unemployment Fraud
You can never eliminate all risk of identity theft. In fact, many victims of unemployment fraud during the COVID pandemic had their personal data compromised from largescale breaches such as the Equifax security breach in 2017, which delivered information from over 143 million Americans into the hands of scammers. In these situations, your data can be stolen through no fault of your own.
However, there are several steps you can take to reduce the likelihood that you’ll become the victim of identity theft and subsequent unemployment fraud:
Guard your Social Security number – This is one of the most important pieces of information an identity thief needs. Never give out your Social Security number unless it’s absolutely necessary AND you trust the source asking for this information. Don’t carry your Social Security card with you since this creates a situation where it can fall into the wrong hands if your wallet is stolen.
Check your financial accounts regularly – Unauthorized charges or withdrawals from your financial accounts can be a clear sign that you’ve been the victim of identity theft. Make it a habit to review all of your account statements on a regular basis, and contact your bank immediately if you notice any suspicious activity on one of your accounts.
Change your passwords regularly – We use more apps and online accounts than ever before. Most of these apps and accounts require the creation of a password. If hackers gain access to the systems storing your account information, they’ll have access to your passwords and other personal data. Changing your passwords on a regular basis can help guard against hackers gaining access to many of your other accounts.
Remove your personal information from social media accounts – Social media accounts are easy places for hackers to access your personal information. For this reason, it’s best to use the most stringent privacy settings on these accounts. Don’t make your birthday, phone number, email address, mailing address or other personal information public on your profile.
Be careful when using public Wi-Fi – Public WiFi isn’t always secure, and it makes you vulnerable to hackers. When connecting to these systems, avoid visiting websites that require you to enter a username and password. In addition, don’t visit websites containing personal information such as bank accounts, health information, credit card numbers or credit reports.
What to Do if You’ve Been the Victim of Unemployment Fraud
If you find out you’ve been the victim of unemployment fraud, it’s crucial that you report the fraudulent activity right away. Make sure to take the following steps:
Report the fraud to your state unemployment agency – Contact your state unemployment agency to let them know about the fraudulent activity. Make sure you document the conversation for your records – write down the case number and the names of anyone you speak to at the unemployment agency.
File a report with the FTC – You should also file a report with the FTC. This can be done by phone at 877-ID-THEFT or by filling out a form online. The FTC can help you take important steps such as pulling credit reports, placing a fraud alert on your credit and closing any fraudulent accounts that have been opened using your identity.
Contact the major credit bureaus – Anyone filing a fraudulent claim for your unemployment benefits most likely has access to your Social Security number. When this information is compromised, it can have a far-reaching impact on your credit and finances. Therefore, it’s crucial that you contact all three major credit bureaus (Experian, Equifax and TransUnion) and have them freeze your credit reports. This will prevent someone from opening an account or applying for credit in your name until you unfreeze your reports.
Notify your employer – Notify any employers from the past 18 months that you’ve been the victim of unemployment benefits fraud.
Premier Employer Services Can Help if Your Employees Are Victims of Unemployment Fraud
If you’ve been notified by an employee that they’ve been the victim of unemployment benefits fraud, Premier Employer Services can help. We offer comprehensive PEO services to address all the needs of your company and your employees. Our exclusive Elevated Engagement Plus® approach ensures that you receive the support you need to navigate these challenging situations. We’ll work with you to make sure these fraudulent claims are handled properly on your end.
Please contact us today to schedule a consultation. We provide employee engagement services to clients in the Denver, Colorado area.
Roger Hays currently serves as President and CEO of PassioHR, Inc., based in Englewood Colorado. PassioHR was founded in 2021 by Roger after having spent over twenty years working in various positions in the Professional Employer Organization (PEO) market.
His areas of expertise are Human Resources management; Benefits Administration; Government Affairs; and Business Management.
Mr. Hays currently serves as the Chair the Leadership Council for NAPEO in Colorado and serves on their PAC committee, Federal Government Affairs and State Government Affairs Committees as well. In addition to NAPEO Roger is a past Leadership Council Chairman for the National Federation of Independent Business (NFIB) in Colorado and serves on their PAC committee as well (NFIB is the voice of small business, advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals). He is a past Board President for the Colorado Civil Justice League (Colorado Civil Justice League is the only organization in Colorado focused exclusively on limiting unreasonable lawsuits and preserving common sense in the courtroom). Roger has been appointed by the Governor of Colorado, three times, to serve as a Board member on the Colorado Uninsured Employers Board. (The CUE board was established by the CO legislature to provide financial assistance to individuals injured while working for employers who did not carry workers’ compensation insurance in violation of Colorado Statute.)
Roger spends many hours each Legislative session working with state Legislators in Colorado on behalf of the PEO industry as well as small business in general testifying in front of committees or just interacting with individual legislators on issues important to those groups. He also works with the Colorado Department of Labor and Employment, serving on a number of taskforces to help guide the department in dealing with Unemployment and Labor issues.
Mr. Hays Graduated from North Dakota State University with a BS Degree in Political Science and is an avid Bison supporter.
