Beware of increased unemployment fraud due to identity theft

The rise in unemployment filings and the expansion of unemployment benefits as a result of the COVID-19 pandemic have contributed to an explosion of fraud across the country. HR departments are responsible to respond quickly to false claims and assist those employees whose personal information has been stolen.

Many employers are receiving notifications of claims for unemployment benefits filed in the name of individuals who remain employed or employees who left the organization years ago. The FBI alerted employers in July about the rise in fraudulent unemployment claims utilizing stolen identity information.

Steps employers should take

1. Monitor and confirm the legitimacy of all unemployment claim notifications.
2. Respond as instructed in the notification. Each state has its own process for submitting and processing unemployment claims.
3. Educate your employees about the spike in fraudulent claims so they can carefully monitor correspondence and bank accounts and take the appropriate steps to avoid becoming a victim of identity theft.
4. Review IT security. Employers should consult with their IT department to confirm that databases containing employee information have not been compromised.

What if we receive a fraudulent notification?

Notify the impacted employee immediately. The filing of a fraudulent unemployment claim is a sign that an employee’s sensitive personal information is available to criminals. The employee should take the following steps:

• Notify all three major credit reporting bureaus and request a “fraud alert” on their credit report:

  Equifax	TransUnion	Experian
  Consumer Fraud Division	Fraud Victim Assistance Dept.	National Consumer Assist
  800.525.6285	800.680.7289	888.397.3742
  P.O. Box 740241	P.O. Box 6790	P.O. Box 9532
  Atlanta, GA 30374	Fullerton, CA 92834	Allen, TX 75013
  equifax.com	transunion.com	experian.com

• Contact banks and credit card companies and follow their advice as to whether to close accounts.
• Contact the Social Security Administration at 1-800-269-0271. Order a copy of his/her Personal Earnings and Benefit Estimate Statement (PEBES) in order to check the accuracy of his/her work history on file with the SSA.
• Notify the Internal Revenue Service’s (IRS) fraud hotline at 1-800-908-4490. Request a copy of his/her Wage and Income Transcript from the IRS. Report and dispute any fraudulent earnings listed on the Wage and Income Transcript. Visit the IRS' Identity Theft Central for additional IRS information. Call 1-877-487-2778, between 8:00 a.m.-10:00 p.m., Eastern time.
• File a report with the Federal Trade Commission.

Report the fraud. Notify both the state unemployment benefits agency and the local police department of the fraud. The U.S. Department of Labor provides employers with resources on how to report unemployment fraud in each state. The State of Kansas has set up a website — ReportFraud.ks.gov — where any fake claims should be reported immediately.

Questions?

For more information or to discuss how to deal with a situation, contact Cindy McSwain using the information below.