Unemployment Scams to Watch Out For

According to Experian:

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Identity thieves are exploiting the COVID-19 pandemic in a new way: by collecting unemployment benefits meant for others. Con artists have always exploited crises, offering “help” as an excuse to trick victims into giving up cash or personal information. Fraudsters started capitalizing on the COVID-19 pandemic in this way almost as soon as the health crisis began.

More recently, amid pandemic-related work slowdowns and layoffs, fraudsters have taken a new criminal tack, submitting bogus unemployment benefit claims and collecting payments intended to help Americans who found themselves without work in the wake of the crisis.

No matter whether you’re one of the 13.6 million nationwide out of work as of August, or you’re still employed and hoping to stay in a job, identity thieves could be attempting to claim unemployment benefits in your name, using personal information they’ve tricked you into revealing or that they’ve gotten through other means.

This Identity Theft Method Can Be Difficult to Detect

Collecting unemployment benefits by impersonating workers is a new spin on the crime of identity theft. Historically, ID thieves have used personal information (names, addresses, Social Security numbers, and more) to take out loans or open new credit card accounts in victims’ names. These bogus loans and credit accounts appear on your credit report and can be spotted relatively quickly using credit monitoring services. Unemployment scams, on the other hand, are harder to detect. According to the FBI, many victims discover them only after one of the following events occurs:

• They apply for unemployment and learn there’s already an open claim in their name.
• They receive a form 1099-G listing unemployment income that’s subject to federal income tax.
• They receive notice from their state unemployment office confirming that a claim has been filed.
• They receive notice from their employer that someone has filed for unemployment in their name.
• Unemployment scammers typically arrange for benefits payments to be deposited into bank accounts they’ve set up. If they do so, unless you file for unemployment yourself and uncover the conflict, it can be extremely difficult to detect the activity.

More rarely, claims filed by scammers result in you receiving an unexpected benefits check, direct deposit, or debit card (whichever payment method is preferred in your state). In that scenario, the scammer may contact you by phone or email, posing as your state labor department and instructing you to “correct the error” by transferring funds to them. Do not respond to any inbound requests to correct surprise unemployment payments; instead, call your state’s unemployment office to report the incorrect payment. Follow their instructions for making any repayments and make sure they look into the possibility of unauthorized filing activity in your name.

If you’ve experienced unemployment benefits fraud, it could mean your personal information has been exposed and is being used in other ways. Consider checking for other forms of identity theft as well.

How Fraudsters Exploit the Rise in Unemployment

The credentials used by unemployment scammers are basically the same ones cybercriminals target through a host of tried-and-true techniques aimed at fooling victims into giving up their personal information. Data obtained through social manipulation, theft, or from another fraudster can be used to file unemployment claims, but the FBI reports that thieves have also come up with some fresh approaches that exploit the rise in unemployment, such as:

• Email or phone solicitations concerning your unemployment forms when you haven’t applied for unemployment benefits. Once you’ve filed an unemployment claim, it’s possible you’ll receive follow-up questions about information you’ve submitted, but if you receive a “follow-up” when you haven’t filed, there are two potential problems:
  • The follow-up is from a legitimate government agency, responding to a claim someone else has filed a claim in your name; or
  • The inquiry is from a scammer trying to get you to give up information they’d need to file a bogus unemployment claim.
• Services that purport to help you file for unemployment. Filing for unemployment benefits is something you must do individually, and if you need assistance doing so, you should contact your local unemployment office. Companies that claim to help with the process and possibly charge fees to do so are simply after your money and/or your personal information. They won’t do anything for you that you couldn’t do yourself for free.
• Bogus websites or social media accounts that resemble those of unemployment agencies. Links to these bogus outlets may be shared via legitimate-looking emails or in the form of official-looking memes or image files. Double-check all URLs for appropriate “.gov” extensions. If you do wish to contact a specific agency, directly visit your state or municipality’s main government homepage, rather than clicking stray links.
• Unauthorized transactions on your bank or credit card statements attributed to unemployment agencies, services, or benefits.

What to Do if You’re a Victim of Unemployment Fraud

If you discover that a bogus unemployment claim has been filed in your name, do the following immediately:

• Notify your local unemployment agency. If the fraud comes to light as you apply for unemployment, the agency will already be notified. If your employer notifies you of a bogus claim, enlist your human resources department to assist with pursuing the false claim—but make sure you also notify the unemployment agency yourself.
• Inform the IRS by filing an Identity Theft Affidavit (IRS Form 14039) with the IRS or through the Federal Trade Commission’s identity theft website, IdentityTheft.gov, where you can also find information on cleaning up the damage identity theft can cause.
• If you suspect unemployment fraud is connected to email or bogus websites or social media accounts, file a report at the FBI Internet Crime Complaint Center.

Can an Unemployment Scam Affect Your Credit?

Neither your income nor its source—including unemployment benefits issued to you or those collected by criminals in your name—appear on your credit reports, so it cannot influence your credit score.

There’s a major way an unemployment benefits scam can affect your credit indirectly, however: If you apply for unemployment and criminals have already filed a claim in your name, there will likely be a delay in your ability to collect your benefits. (Staff at your local unemployment office—likely overworked with the high volume of COVID-19-related claims—will need to investigate, close the bogus account, and so on.) You’ll eventually get the benefits to which you’re entitled, but if you miss any debt payments before that happens, that could have a significant negative effect on your credit score. Seeking COVID-19-related payment relief from your creditors could help prevent delinquencies from being reported on your credit reports and hurting your scores.

Also, note that criminals who have enough of your personal information to file a false unemployment claim likely have the credentials they’d need to open new credit accounts in the future. It’s therefore critical to continue checking your credit reports for unexplained activity (reports of credit inquiries you can’t identify, new accounts you didn’t open, and so on). It’s also worth considering using a credit monitoring service (such as the one Experian offers for free) and taking other steps such as placing a fraud alert on your credit report. A fraud alert will ask creditors to confirm your identity before processing loan applications made in your name.

The Bottom Line

The uptick in fraud associated with COVID-19 and the related surge in unemployment compounds an already stressful and difficult situation. Just as the pandemic will run its course, so, too, will this economic downturn and the spate of crime it has encouraged. If criminals have meddled with your unemployment claims, know that those issues will be resolved in time. In the meantime, apply as needed for payment relief from your creditors, keep a close eye on your credit reports, and when you get the benefits you deserve, use them to bridge the gap to better times.

Did You Receive Money From A Scammer, Or Give A Scammer Access To Your Accounts?

You may have become a Money Mule. This is a crime!

You may have been involved in money laundering or aiding and abetting transnational criminals. Do not try to hide from this – this is serious, and if you are discovered (and you will be) then you might be prosecuted.

You should report these crimes to your local police – however, we strongly recommend that you speak with a Criminal Defense Attorney immediately. You have no time to waste. You cannot avoid this, do it today!

SCARS is not a law firm and we are not attorneys. The information we provide is for educational purposes only. See additional disclaimer below.

To find a criminal defense attorney in the United States visit FindLaw here: Criminal Law – FindLaw  For other countries look for your local directory of criminal defense attorneys or solicitors.

Widespread Unemployment Fraud Strikes During the Pandemic: Steps for Individuals and Businesses

According to IDWATCHDOG.com (an Experian Company)

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According to reports, a widespread unemployment benefits scam is affecting tens of thousands of individuals, slowing the delivery of legitimate claims and costing states hundreds of millions of dollars. Learn how both individuals and businesses can help better detect and protect against unemployment fraud.

How the Unemployment Benefits Scam Works

According to a US Secret Service memo, this wave of unemployment fraud is likely being executed by a well-organized crime ring that appears to have extensive records of personally identifiable information taken during previous cyber hacks. The scammers are reportedly filing fraudulent unemployment claims on behalf of unsuspecting victims using stolen Social Security numbers and other information.

In many cases, fraudulent unemployment payments are deposited into bank accounts controlled by the scammers. However, if payments are sent to the victim’s legitimate bank account instead, the criminals may continue the scam. Fraudsters may contact the victim by phone, email or text message and impersonate an unemployment official, telling the victim that the payment was made in error in an attempt to get them to transfer the funds.

Employed or Not: Anyone Can Be a Victim

According to the Internet Theft Resource Center (ITRC), anyone can be a victim, and individuals with and without a current position have been impacted. Both public and private employers have identified suspicious claims filed on behalf of employees who still held their jobs. In one case, Western Washington University stated that 410 of its 2,463-person staff had been targeted by the scam.

Employed victims may learn of the fraud when their employer asks why they have applied for jobless benefits. A victim who is currently unemployed may find out about the crime when they apply for unemployment themselves and state labor officials notify them that someone is already collecting unemployment using their identity.

Some states have begun adopting measures in the hopes of reducing unemployment fraud, such as reviewing past applications and delaying payments. According to reports, applicants of unemployment benefits have reported delays and challenges in getting applications approved.

Unsuspecting Victims Could Be Lured as “Money Mules”

Experts say that a substantial number of money mules may be helping facilitate these crimes. Money mules are individuals asked to receive funds in their personal bank account and then “process” funds via wire transfer, mail, or money service. They may be lured in by quick-money job offers or online romance scams.

The FBI advises individuals to better protect themselves by refusing to send or receive money on behalf of individuals and businesses for which they are not responsible, and to be wary of online job postings and messages promising easy money for little to no effort.

If You Think You Have Been a Victim of Unemployment Benefits Fraud

The FTC advises individuals to act quickly if they suspect unemployment fraud.

• Report the fraud – Report suspected unemployment fraud to your employer, the state unemployment benefits agency, and the FTC at IdentityTheft.gov. It’s a good idea to keep a record of the communication.
• Better protect your credit – Consider locking your credit report or placing a one-year fraud alert, an extended fraud alert, or credit freeze, which can make it more difficult for an identity thief to open new accounts in the victim’s name.
• Regularly review credit reports – Check your credit report for unrecognized activity which could be a sign of potential fraud.

How Employers Can Help Better Protect Their Employees

The FTC advises businesses to respond quickly to any suspicious unemployment claims and help support employees.

• Notify the workforce – Ask employees to report fraudulent benefits claims to HR, and ask HR to notify employees about any suspicious claims that the company receives.
• Report fraudulent activity – Depending on the state, the state unemployment benefits agency may require a fraud report from the employer, the employee, or both. Provide the employee with a copy of any documentation of the company’s report.
• Refer employees to the FTC at IdentityTheft.gov – A fraudulent unemployment claim means that the employees’ information is likely exposed, which could put them at risk for further harm. Employees can report the identity theft to the FTC at IdentityTheft.gov.
• Conduct a cybersecurity checkup – Consider doing a check-up on the company’s cyber defenses. The FTC provides a guide for Cybersecurity for Small Business.