There are two basic types of unemployment fraud scams. One type involves people seeking unemployment benefits they are not actually entitled to because they are still receiving a paycheck. Sometimes workers who are being paid “off the books” commit this type of fraud.
Another type of unemployment fraud is essentially a form of identity theft. It involves people seeking unemployment benefits they aren’t entitled to by pretending to be someone else.
This form of unemployment fraud has been on the rise lately. Because the COVID-19 pandemic has left many without work, scammers have more opportunities than usual to commit unemployment fraud.
That’s why it’s important that everyone be familiar with signs of unemployment fraud. Although it would be impossible to cover all of these in a single blog post, as scammers are constantly coming up with new methods of stealing your information, the following are some of the more noteworthy ones. If you notice any of these, strongly consider reporting the potential fraud to the U.S. Department of Labor (or the relevant government agency in your country) and your state employment office.
Receiving Unexpected Benefits-Related Paperwork
To collect unemployment benefits they are not entitled to, scammers need to have certain information that is required when applying for said benefits, such as an individual’s social security number and other such information.
Sometimes they collect it by sending what appears to be legitimate unemployment benefits paperwork to a target. They ask that the recipient fill out the paperwork (thereby providing the information a scammer needs to steal their identity) and send it back to them.
Keep this in mind if you receive unemployment benefits paperwork in the mail. If you did not expect to receive such paperwork, there is a strong chance you’re being targeted by a scammer. Keep in mind, if a scammer has successfully stolen your identity already and used it to apply for unemployment benefits, you might also receive unexpected legitimate unemployment benefits paperwork.
A Denied Claim
When an unemployment fraud scammer is successful, they collect benefits to which another individual was entitled. Those paying out the benefits are operating under the assumption that the individual they’re meant for is the one receiving them. Thus, you may file a legitimate claim for unemployment benefits, only for it to be denied. Those reviewing such claims may believe the benefits have already been paid out to the correct person. If this ever happens to you, you’re most likely the victim of fraud.
1099-G Tax Form Signs
If you ever receive a 1099-G tax form, review it carefully. Specifically, review Box 1. The information in this box may indicate you’ve received unemployment benefits that you did not actually receive. Or, it may indicate that you’ve received an amount that exceeds what you were paid. This is another sign you’ve likely been the target of unemployment fraud.
An Employer Notice
Unemployment fraud scammers don’t always know whether a target is actually employed or not. They apply for benefits hoping the person whose identity they’re stealing is entitled to them.
Because of this, your employer may one day receive a notice that you’ve applied for unemployment benefits even though you’re still working. If your employer mentions receiving such a notice, someone may have attempted to steal your identity.
This is of course also important to keep in mind if you are an employer. Don’t dismiss such notices as mere errors if you ever receive them. If you receive a notice indicating an employee who’s still working for you applied for unemployment benefits, don’t assume it’s an error, don’t immediately assume the employee was trying to commit fraud, and, most importantly, alert the employee in question right away.
You should also report potential fraud if this happens. Whether the individual committing said fraud was a scammer or the actual employee named in the notice, whenever you receive a notice telling you an employee applied for unemployment benefits, it’s highly likely someone was committing fraud. You have a responsibility to alert the Department of Labor and your state employment office accordingly.
This blog has previously covered signs of phishing emails. Scammers send these emails pretending to represent companies or government agencies seeking information about a target’s identity. For example, you might receive an email claiming to be from your bank or the IRS telling you to click immediately on a link and provide the information requested.
Sometimes phishers even pretend to be individuals a target knows and trusts, such as an employer. Because phishing emails are among the most common methods unemployment fraud scammers use to collect information about a target’s identity, it’s very important that you be familiar with their signs. Review this blog’s coverage on the topic and vigilantly review any suspicious emails you receive.
Remember, unemployment fraud scammers have taken advantage of the COVID-19 pandemic for their own financial gain. Because anyone can be the victim of unemployment fraud, we all must be familiar with these warning signs.