Wherever there are funds that can be stolen, identity thieves are likely to be at work. It turns out that unemployment benefits are no exception.
Unemployment scams have become more lucrative during COVID-19, as states have experienced overwhelming benefits claims from millions of first-time filers. There is a priority for states to get that money out quickly, even more so during a pandemic, so they don’t wait for an employer to verify the identity of the person who’s applied for benefits online.
A clear sign of these benefits being targeted by fraudsters, the Identity Theft Resource Center has received more complaints of unemployment identity theft in the first two weeks of May this year as they did in all of 2019. Certain states, such as Washington, Massachusetts, Florida, Oklahoma, and Rhode Island, have seen a particularly heightened increase of fraudulent unemployment claims, catching hundreds of thousands of individuals off-guard, and bilking millions of dollars from the system with false claims.
Signs of Unemployment Identity Theft
Much like medical identity theft or tax identity fraud, you may not find out about the theft associated with unemployment fraud until much later — sometimes, even years down the road.
Some people discover they’ve been victims of unemployment identity theft only when the time comes to file their own claims. That’s when they might be rejected because whoever used the identity to collect benefits “maxed out” the available unemployment funds.
Other times, your employer may be notified that you’re receiving benefits, prompting a tangle of confusion and paperwork that can impact your credit health and even future job prospects.
Additional signs that you may have been affected include:
- Requests for information from your state’s unemployment office
- Loan rejections based on your employment status
- IRS letters about underreporting of benefits you’ve supposedly received
- Employer notification regarding unemployment claims you’ve filed
How to Protect Yourself from Unemployment Fraud
To protect against this type of unemployment identity fraud, it’s important to take a proactive approach. Consider these strategies:
- Stay on top of news about unemployment fraud in your state; thieves often draw benefits using numerous identities, leading to a spike in activity.
- Guard your Social Security number, as this is the most important piece of information that thieves need. Give out the number only when absolutely necessary (don’t enter it on forms unless you know how that paperwork will be used) and don’t carry your Social Security card with you. If you suspect your Social Security card is lost or stolen, take steps to replace it, and monitor for any suspicious activity.
- Don’t put your birthdate on social media. It’s fine to announce it’s your birthday, but sharing your exact age gives thieves another piece of useful information, and can be used to commit synthetic identity theft.
- When using public Wi-Fi, don’t visit any sites that require a user name and password, and especially don’t visit sites with information like health insurance data, banking and credit card numbers, or credit report results. If you need to connect, make sure you have mobile security features, including a Virtual Private Network (VPN), on your mobile device to keep information protected.
Are You a Victim of Unemployment Identity Theft?
If you do receive an unexpected letter from your state unemployment insurance office, detailing unemployment claims using your personal information (Social Security number, birth date, name, or address) that you have not made, you should report the suspected fraud immediately.
- Report the crime immediately. The U.S. Department of Labor lists state websites and tip hotlines for reporting unemployment fraud.
- File a non-emergency police report so you have documentation of the suspected identity theft.
- Notify your current and former employers for the past 18 months that you believe your identity was used to file for bogus unemployment benefits.
- Consider placing credit freezes with all three major consumer credit bureaus. While a credit freeze won’t stop the majority of identity theft from occurring, it can alert you to suspicious activity and is an important part of layered protection against identity crime.
- File a complaint with the FTC.
Acting quickly can stop improper payments and also creates a record of your efforts to shut down the theft. If possible, work with your company’s HR department to verify your employment files are accurate once the theft has been handled.
This article was written for Business 2 Community by Donna Parent.
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