The 31 Flavors of Identity Theft – Unemployment Fraud

#12 Unemployment Fraud

Pandemic Unemployment Assistance Program Leads to Widespread Fraud

Unemployment fraud has existed for years, but never has it been more prevalent than it is today. Widespread unemployment, and the PUA programs that have been created to aid individuals who have lost their jobs, are supplying a treasure trove of opportunity for organized cybercrime.

Estimates suggest that there have been anywhere from $10 billion to $200 billion paid out in fraudulent unemployment benefits over the last year alone – that higher figure approaches half of the total amount of claims paid out since the beginning of the pandemic. These alarming figures represent a very real threat to those who desperately need unemployment funds to put food on their table. The fraud also presents a risk to every American citizen as identity theft made possible through access to your personal identifying information is what criminals use to defraud the system.

Basic PII information such as a name and social security number is all that is needed in many states to apply for the increased unemployment benefits that are currently available. But that same information is all that is needed to file a fake claim as well. A single fraudulent claim can net upwards of $20,000 and with networks of threat actors already having access to the PII of much of the population, the billions available to be stolen are an obvious allure.

Unemployment benefits are handled on the state level, and although safeguards are slowly improving, the systems in place do not have the capabilities to adequately deal with the sheer scale of fraud currently occurring. Some states are unaware of the amount they have paid in bogus claims. Others are unwilling to report the numbers caused by security concerns that may mask an inability to get ahold of the situation. Federal agencies such as the FBI and Department of Labor are sending funding and resources to states to help combat the crisis. And despite the best attempts by authorities to limit it from happening, unemployment fraud continues at a distressing rate.

Signs You May Be a Victim of Unemployment Fraud

  • Receiving an unexpected notice in the mail regarding an unemployment claim filed under your name
  • An employer receives notice of a claim under the name and SSN of a current employee who is still employed
  • You receive a 1099-G listing unemployment income that you have not received
  • You receive notices from the state indicating fines or interest payments on overpaid benefits that you have never filed for or collected
  • You file a legitimate UI claim and find that one already exists under your name

You should report any suspected fraud to your local unemployment agency. You should also keep an ever-present eye out for attempts to steal your PII through emails or fake websites claiming to provide access to PUA funds. Identity restoration is essential if you are a victim of unemployment fraud.

Credit monitoring will not alert you to this type of fraud, however, LibertyID will take the following steps for/with their members:

  • Place fraud alerts at all three credit reporting agencies
  • File an Identity Theft Affidavit (Form 14039) with the IRS
  • File report with FTC
  • Review credit reports with the victim to ensure there are no other types of fraud
  • Provide credit monitoring with alerts for 12 months
  • Periodically contact the member throughout the 12 months following resolution of their ID theft recovery case if warranted.