The pandemic has served as cover for all types of scams and the latest of note exploits the barrage of unemployment benefit claims filed due to the COVID-19 crisis. New York’s Attorney General, Letitia James, has issued warnings about the surge of fraudulent unemployment claims. According to James, scammers with access to databases with personally identifiable information (PII) have sought out cooperation from “mules” who are used as intermediaries for filing fraudulent claims seeking benefits. New York is not alone fighting this battle. The FBI issued a notice that in several states, criminal actors have been impersonating individuals to submit fraudulent unemployment insurance claims online. It has been reported that a foreign crime ring launched a coordinated attack in several states including Massachusetts, Florida and North Carolina, and that the fraudulent unemployment benefit payments may cost up to $26 billion nationwide.
This particular fraud exploits individuals and taxes companies. For individuals, it may be the first indication of identity theft when they are contacted about unemployment benefits for which they did not apply. Some legitimate recipients of unemployment benefits have seen the application process interrupted, their payments delayed, or worse – diverted. HR departments are obliged to respond when a claim for unemployment benefits is filed, whether legitimate or not, thus tying up departmental resources to iron out the problems when a fraud occurs.
Be on the alert for fraudulent unemployment benefit claims. Also, it may be advisable to alert employees about this scam and remind them to be vigilant in protecting their personal information. Everyone should be on the lookout for:
Communications regarding unemployment insurance forms when they have not applied for unemployment benefits
Unauthorized bank or credit card transactions or fees related to unemployment benefits
Unsolicited inquiries related to unemployment benefits
Reports of fraudulent activities of this nature should be made to a state department of labor unemployment insurance program and a state’s attorney general’s office.