PayNews: Surge in unemployment claim fraud amidst COVID-19 crisis

UPDATE: Immediately following the posting of this blog post, the Seattle Times published this breaking news update:

Washington to pause unemployment payments after finding $1.6 million in suspected fraudulent claims

Washington state officials say they’re pausing unemployment payments for two days while they attempt to block a gush of fraudulent claims aimed at stealing some of the billions that Congress directed to workers left jobless amid the coronavirus pandemic. The surge in fraudulent claims comes as the state is trying to process a massive wave of legitimate claims for jobless benefits.

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Recently, unemployment fraud has spiked amidst this COVID-induced economic downturn. Fraudsters are creating state accounts using previously stolen social security numbers and residency addresses to file for state unemployment. In Washington State we have been made aware by several of our clients that they have received notices of claims filed by employees who are still working for them and did not in fact file for unemployment.

So, what can be done? For employers, it is a fairly straightforward matter of responding to the claim paperwork indicating that the employee was not, in fact, terminated. This is a hassle and needless paperwork during a time when a lot is being placed on employers’ shoulders, but is straightforward enough.

For employees, it is recommended that each employee set up their account at their state unemployment office (for Washington state this is a SAW account and can be done here). This will prevent a fraudster from using an employee’s information to set up a bogus account since only one account may be set up per social security number.

For employees who have had their personal information already used and abused, the recommended response is a little more daunting, though important.
For employees in Washington, Seattle Police Department cyber-crime investigators are recommending the following steps for anyone who knows, or believes, they are a victim of unemployment fraud:

Step One – Contact HR

• Contact your organizations HR staff to coordinate and report the incident to your employer.

Step Two – Contact Washington State ESD

• Call the WA State Employment Security Dept (ESD). at 800-246-9763 to report the fraud.
• You will need the following information for identity verification.
• Last 4 of your SSN:
• Date of birth, address
• Current phone #
• Information on how you learned a claim was filed on your behalf
• Or contact ESD via an online form.

Step Three – Police Report

• File an online or non-emergency report with the agency whose jurisdiction you live in. (Spokane County – Crime Check 509-456-2233)
• Start keeping a file folder or journal with the information from this incident, including any case numbers. Some government services and accommodations are available to victims of identity theft that are not available to the general public, such as getting certain public records sealed.

Step Four – The Three Major Credit Bureaus

• Obtain your free credit reports from Equifax, Experian, and TransUnion at Annual Credit Report or call 1-877-322-8228
• Report to the credit bureaus that the fraudulent claim was made using your identity and provide them with the case number from your police report. You can have a fraud alert put on your identity or freeze your credit. Doing either is free by law.
• A fraud alert is free and will make it harder for someone to open new accounts in your name. To place a fraud alert, contact one of the three credit bureaus. That company must tell the other two.
• Experian 1-888-397-3742
• TransUnion 1-800-680-7289
• Equifax 1-888-766-0008
• Check your credit activity at least once a year. As a victim of identity-theft you have the right to check it monthly if you choose.
• Credit Freeze – If you do not have upcoming large purchases, such as a home, you may want to freeze your credit for more protection. It is free and you can do it yourself.

Step Five – FTC & IRS

• File a short report with the FTC and give them the case number for your local police report. More info here.
• Consider setting up an IRS account. If you create an account with your social-security number it will prevent criminals from creating an account using your identity.
• Another option is to lock your social-security number (The next wave of this cyber-attack may be IRS tax fraud.)
• All of this reporting seems redundant, but we want to make sure you are recognized as a victim by the local, state, and federal government. Also, the more people who report it, the more support Law Enforcement agents will get to pursue the perpetrators.

Step Six – Keep Your Notes

• Hang on to any notes, copies of emails, etc. This is the paper trail that you can reference if you face any identity issues or locate inaccuracies on your credit history sometime in the future.

This is one more challenge to hit employers and employees during this difficult time. Prompt action and some persistence on the part of all can help shut down this latest scheme to defraud states and the federal government of unemployment funds meant to help those truly out of work.