Jobless Claims Siphoned Away Over $163 Billion in 2021Has someone claimed unemployment benefits in your name? You’re not alone. Show
The U.S. government created the Unemployment Insurance (UI) program to offer temporary financial support to people seeking jobs. However, since 2020, identity thieves have exploited the system to pilfer over $163 billion in UI scams.[*] With large-scale job losses at its heels, the pandemic forced the government to provide additional support. Fraudsters weren’t far behind. With your Personal Identifiable Information (PII), identity thieves can apply for UI benefits they’re not entitled to — like the 28-year-old from Virginia who collected almost $500,000in UI funds after filing fraudulent jobless claims for at least 37 people.[*] This article will explain how unemployment fraud occurs and what to do if someone claims benefits in your name. How Does Unemployment Fraud Happen?“Someone claimed unemployment in my name." There were more than 5,000 monthly searches for this phrase on Google in January 2021, at the height of the pandemic. UI benefits fraud is a common type of identity theft that can happen to anyone who doesn’t protect their personal information. This can include information like your Social Security number (SSN), phone number, or date of birth. Scammers can get ahold of your personal information through many methods. Mail theft, phishing emails, marketplaces on the Dark Web, and data breaches are a few examples. Here are four ways fraudsters can use stolen PII to defraud the government’s Unemployment Insurance benefits program.
Multi-state claimantsIllegitimate multi-state claims are common UI fraud occurrences. Identity thieves can reuse your personal information (PII) to make claims in multiple states, getting in the way of bonafide claims. Often, the thieves aren’t even in the country. A Nigerian engineering student estimates he pocketed $50,000from unemployment benefits meant for out-of-work Americans.[*] Scammers like these often congregate on apps like Telegram which peddle how-to advice about identity theft. Social Security numbers of “claimants” who are deceasedIf the family has not reported a death, government payments will continue — and thieves can intercept these stimulus payments. Scammers can obtain the SSNs of deceased people and use the numbers to run Unemployment Insurance scams. In 2020, a 43-year-old man and a co-conspirator were found guilty of stealing almost $1 millionfrom the government’s Paycheck Protection Program.[*] The group invented synthetic identities using SSNs stolen from children, new immigrants, and even the deceased. Armed with these fake identities, they applied for Small Business Administration-backed loans meant for COVID-19 relief. 📚 Related: Can You Change Your Social Security Number? (How-To Guide) → Claims made in the names of ineligible federal inmatesFederal inmates are ineligible for unemployment benefits in the United States. The State Workforce Agencies (SWAs), however, may overlook details — like whether an applicant is incarcerated — due to SWAs’ crushing processing volumes. A woman serving a life prison sentence led a gang that claimed over $2 million in California Unemployment Insurance benefits.[*] Most of the theft was carried out by using stolen identities — many of which belonged to California prison inmates. Claimants with suspicious email accountsFraudsters may use multiple email accounts with strange addresses to run their scams while remaining anonymous. Foreign email accounts or randomly-generated addresses make it hard for law enforcement to clamp down on scammers. A Nigerian politician used several variations of the same email address to file fake unemployment benefits in 11 U.S. states.[*] Google disregards periods between words when routing emails to a Gmail account, but SWA servers treat each variation as a unique email address. This ploy enabled the scammer to file and manage multi-state claims from a single email account. Someone’s Claiming Your Benefits: Five Glaring SignsWhen fraudsters have your PII, they can open up credit lines, run bank scams, and even steal your home. All of these types of fraud have warning signs, which begs the question: how do you know if someone has claimed unemployment in your name? Unexpected benefits-related paperworkIt’s always a red flag when you receive unsolicited financial paperwork. If a supposed SWA sends you documents about benefit payments without your request, don’t ignore it. Someone may be trying to abuse your PII to get UI benefits. A notice from your employerJust as with government entities, your employer will not send you UI paperwork without your requesting it. If your employer sends you UI-related documents, then someone else has already put the unemployment process in motion without your consent. Legitimate UI claims are deniedIt can be alarming if you qualify for Unemployment Insurance, only to be denied. But before you assume that you made a mistake or are not eligible, consider the possibility of fraud. If an impersonator already processed benefits in your name, it could be the reason you were denied. Receiving UI benefits that you didn’t claimAnother way to know someone has claimed unemployment in your name is if you receive benefits despite not lodging an application. This surprise UI approval could come in the form of an email or actual letter in the mail. Either way, if you did not apply for benefits yourself, chances are someone has committed fraud against you. Your 1099-G form shows multi-state UI incomeMost people who file for unemployment will only do so in one state. If you only apply for UI in your home state, but your 1099-G form indicates that you are receiving benefits in various states, you are likely a victim of fraud. A criminal may have applied for UI in another state, hoping that you won’t flag it because you still receive your original benefits. ✅ Take action: If you accidentally give scammers your personal data (or its leaked in a data breach), they could take out loans in your name or empty your bank account. Try an identity theft protection service to monitor your finances and alert you to fraud. Someone Claimed Unemployment in My Name — What Can I Do?If you believe you were the victim of unemployment fraud, all is not lost. While there's no guarantee you'll catch the perpetrator, it's crucial to take action to limit the damage to your credit and to help authorities clear your name. Here are 12 steps you can take:
1. Contact your state unemployment officeThe U.S. Department of Labor's (DOL) Unemployment Insurance programs are managed through a network of nationwide offices. If you think someone has claimed unemployment benefits in your name, the first thing you should do is get in touch with your local office to report the fraud. Here’s how you do it:
2. Do the same for multi-state claimsCriminals may have made fraudulent claims in your name across multiple states. In this case, you must contact the state unemployment office for each state where the illegal UI claims were filed. Here’s how you do it:
3. Alert your employerWhen someone files for unemployment in your name, the consequences also impact your employer. Keep them in the loop so they can submit timely reports that substantiate your complaint. Here’s how you do it:
4. File an identity theft report with the FTCThe Federal Trade Commission (FTC) is responsible for enforcing U.S. antitrust laws and promoting consumer protection. As an independent agency of the United States government, they help people report fraud and recover from the impact of identity theft. Here’s how you do it:
5. File a police reportFiling a report with a local police department is a crucial step in recovering from Unemployment Insurance fraud. You could help authorities investigate the crime and prevent others from falling victim. Here’s how you do it:
6. Submit a complaint to the National Center for Disaster FraudThe National Center for Disaster Fraud (NCDF) is an agency within the Department of Justice's (DOJ) Criminal Division. They focus on criminal conduct related to natural and man-made disasters and other emergencies. The huge expansion in disaster funds during the pandemic presented an increased opportunity for scammers to claim Unemployment Insurance benefits. Here’s how you do it:
📚 Related: 7 Ways to Spot FEMA Scams and Protect Your Relief Money → 7. Place a fraud alert with Equifax, Experian, and TransUnionA fraud alert is a warning on your credit report alerting creditors that your PII may be compromised. As a result, creditors should contact you by phone to verify your identity and get verbal consent before proceeding with any credit applications. Here’s how you do it:
📚 Related: How to Remove a Fraud Alert (Step-by-Step Guide) → 8. Freeze your creditA credit freeze or security freeze, is an anti-fraud measure that limits access to a credit report and stops credit bureaus from sharing consumer data. Once you place a freeze, it locks the data and prevents anyone from opening new credit accounts. Your report will stay sealed until you give the bureau permission to release the data. Freezing your credit is one of the safest things to do when you suspect fraud. It is also a smart step for parents who want to protect their children from identity theft. Here’s how you do it:
📚 Related: Fraud Alert vs. Credit Freeze: Which Can Protect You More? → 9. Monitor your credit reports and financial statementsQuite often, victims of identity theft don’t realize that they have been targeted until months or even years later. Keeping a close eye on your credit reports and financial statements is the fastest way to spot suspicious activity. Unfamiliar transactions or requests for credit should raise a red flag. Here’s how you do it:
✅ Take action: Protect yourself from the risks of identity theft and fraud with Aura’s $1,000,000 in identity theft insurance. Try Aura free for 14 days to see if it’s right for you. 10. File your taxes earlyAccording to The National Taxpayer Advocate, tax refund delays rank at the top of all serious threats against taxpayers.[*] The influx of stimulus payments and burgeoning fraud have slowed down tax filing. But the sooner you file your tax returns, the better. Taking quick action gives criminals less time to fraudulently claim benefits or file taxes in your name. Here’s how you do it:
11. Protect your privacy onlineHackers can easily crack weak passwords or run scams with your phone number. Phishing emails can lure victims into clicking on malicious links that lead to fake websites or can install malware. If you click on the link, you could unwittingly give thieves access to your computer and sensitive information. Here’s how you do it:
12. Report fake UI benefits websitesScammers send spam emails and text messages that purport to be from an SWA. These emails encourage people to click on links that then lead them to bogus websites. Reporting any suspicious activity around SWA sites can help authorities stop fraudsters in their tracks. Here’s how you do it:
Most Red Flags Are a One-Off — Until They’re Not. Aura Can Help.Fraudulent UI claims don’t just get in the way of much-needed financial assistance. They also leave you with the herculean task of proving your innocence until you can finally claim your benefits. Protect your PII by practicing good digital hygiene and learning more about common scams, like phishing and smishing, so scammers don’t catch you off guard. If you want the best chance of protecting yourself (and your family) from identity thieves, you can't do better than Aura's credit monitoring and identity theft protection service. Aura provides:
Identity theft and unemployment fraud are related. Sign up for Aura and save 50% today →What do I do if someone is using my Social Security number for employment?Contact the Internal Revenue Service (IRS) at 1-800-908-4490 or visit them online, if you believe someone is using your SSN to work, get your tax refund, or other abuses involving taxes. Order free credit reports annually from the three major credit bureaus (Equifax, Experian, and TransUnion).
What do I do if I gave my social security number to a scammer?You can contact the OIG's fraud hotline at 1-800-269-0271 or submit a report online at https://oig.ssa.gov/.
What do I do if someone stole my identity?Report identity (ID) theft to the Federal Trade Commission (FTC) online at IdentityTheft.gov or by phone at 1-877-438-4338.. You know the identity thief.. The thief used your name in an interaction with the police.. A creditor or another company requires you to provide a police report.. |