False unemployment claims hit businesses and employees

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Unemployment fraud

An unemployment benefits claim lands on your desk. You glance at the name of the employee, and it's someone who is still actively working at your company! How could someone employed at your company be filing for unemployment?

This scenario has played out across hundreds of business in numerous states over the past few weeks, most prominently in Washington, Maine, Massachusetts, and Rhode Island - though reports indicate the scam is occurring across the country.

Government authorities and state agencies have warned of an ongoing, orchestrated unemployment scheme targeting individuals who are still working and did not file for unemployment themselves.

The scammers likely gained access to personal identifiable information like Social Security Numbers by harvesting data from prior national breaches.

Then, they use these stolen credentials to fraudulently file for unemployment benefits. 

The scheme comes as states grapple with an influx of unemployment benefits claims - tens of millions of Americans have filed in recent weeks - and as unemployment benefits have been bolstered under the CARES Act.

In addition, employers should note that the scam has been reported across industries and a wide range of positions - from executive-level to maintenance staff.

So, what action should you take if you notice or suspect fraudulent claims for unemployment on behalf of your employees?

According to a post from top employment and labor law firm Pierce Atwood, the  sheer scale of the fraudulent activity means it's highly unlikely that the breach of personal information came from inside your company. However, there are several steps you should consider taking if you believe your employees are being targeted in this scheme:

  • Confirm that the employee or former employee has not filed for unemployment benefits if you can;

  • Notify the state unemployment office fraud department and provide the names of the affected employee(s). Here is the contact information for the currently heavily-affected states:
  • Notify the affected employee(s) that their Social Security number has been compromised and advise them to:
    • Take steps to protect their credit, including locking their credit and other steps – a good reference is www.identitytheft.gov;
    • Hold on to any paperwork they receive from unemployment;
    • Do not use any benefits received (such as a Visa debit card) but hold onto the benefits for the investigation;
    • Be vigilant about any other potential impact on their finances.
  • Let employees know they should remain vigilant and to notify a company point of contact if they believe unemployment benefits may have been filed fraudulently on their behalf.



SOURCES
COVID-19: Rash of Fraudulent Unemployment Claims Blanketing New England
Be on Alert for National Unemployment Insurance Scam

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