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Unemployment Insurance Fraud

By Gille Ann Rabbin, Esq., CIPP/US, CIPP/E

  I was hoping not to write about scams for the second column in a row, but when a victimized relative came to me for advice last week I thought it might be helpful to revisit the area again. The flavor of the month (actually the past six or so months)? Unemployment insurance fraud.

Unemployment insurance fraud can, like most frauds, take several forms (providing false information on an application, saying you’re not working when you are, working off the books while collecting benefits, etc.). A particularly prevalent form consists of using another person’s identity (like their name and Social Security number) to file a fraudulent claim. Back in the summer, the NY Department of Labor (DOL) reported that it had identified and prevented more than 42,000 fraudulent unemployment benefit claims totaling over $1 billion since the pandemic began in March.

Scammers, often unknown to the victims, are continuing to file fraudulent claims using New Yorkers’ identities to collect benefits in the names of individuals, like my relative, who are not unemployed. My relative was made aware of the scam when she received a letter from the DOL telling her it had blocked a claim by a scammer who had applied for benefits using her information.

The communication did not tell my relative what information was used or the name of the criminal. According to the DOL, droves of scammers are using identities and personal information likely stolen during data breaches at institutions like banks, insurance companies, or employers and using this info to file the claims online.

This type of fraud often targets people who are employed because a person with a job typically won’t have an active unemployment insurance claim that would block a scammer from filing another claim in their name. The DOL stated that employees working in healthcare, government, education, and not-for profits have been particularly impacted and should be vigilant.

You can find out if you’ve been victimized in several ways: for example, the DOL may contact you as they did my relative to tell you they stopped an attempted fraudulent claim; you may receive a notice from the DOL or your employer regarding your “claim” (which you didn’t make) or, less frequently, you may see payments for benefits you never requested deposited in your account.

If you are a victim of this scam, file a report with the NYS DOL at on.ny.gov/uifraud. Assume you are an identity theft victim and take measures to protect yourself from further identity theft. These can include placing a fraud alert or security freeze at each of the big three credit reporting agencies (TransUnion, Experian, Equifax) which can make it difficult or impossible for a thief seeking to use your identity to open a new line of credit; regularly monitoring your credit reports (you’re entitled to a free one every four months thorough annualcreditreport.com); and changing logins, passwords and PINs for sensitive online and offline accounts.

For more information on what to do to protect yourself from identity theft, visit the Federal Trade Commission’s helpful website at www.ftc.gov.

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