HUMAN RESOURCES
UNEMPLOYMENT FRAUD ON THE RISE
By : Kristina Dietrick , PHR , SHRM-CP
The rise in unemployment filings and expansion of jobless benefits in the wake of the ongoing COVID-19 pandemic has facilitated an explosion of fraud across the country . HR has a responsibility to respond quickly to phony unemployment claims and assist employees whose personal information has been stolen .
“ With the broad expansion of unemployment benefits during the pandemic and states racing to get them distributed , fraud was a concern from the outset ,” said David Fryman , a partner and member of Ballard Spahr ’ s labor and employment group in Philadelphia . “ Sure enough , state and federal entities are reporting significantly increased instances of fraudulent claims for unemployment benefits . Across several states , employers report receiving notifications of claims for unemployment benefits filed in the name of individuals who remain employed or employees who left the organization or retired years ago .”
The Coronavirus Aid Relief and Economic Security ( CARES ) Act expanded unemployment benefits for people affected by the COVID-19 pandemic in several significant ways , including by upping the weekly benefit amount by $ 600 through July 31 . And even though the additional $ 600 is no longer offered , many states are now approved to participate in a $ 400 extra unemployment payment program launched August 8 by the Trump administration .
FBI WARNING The FBI alerted employers in July about the rise in fraudulent unemployment claims using stolen identity information . “ The criminals obtain the stolen identity using a variety of techniques , including the online purchase of stolen personally identifiable information , previous data breaches , computer intrusions , cold-calling victims while using impersonation scams , email phishing schemes , physical theft of data from individuals or third parties , and from public websites and social media accounts , among other methods ,” the agency said .
The large-scale scams involve filing claims for benefits using the names and personal information of people who have not lost their jobs , said Seena Gressin , an attorney with the Federal Trade Commission ( FTC ), who focuses on identity theft and fraud prevention . “ The investigation is ongoing , but this much is known : The fraud is affecting tens of thousands of people , slowing the delivery of benefits to people in real need , and costing states hundreds of millions of dollars ,” she said . “ Most people learn they ’ re affected when they get a notice from their state unemployment benefits office or their employer about their supposed application for benefits . By then , the benefits usually have been paid to an account the criminals control .”
The prevalence of reported incidents from every corner of the country is staggering . Here are just a few of the cases :
• Georgia found more than 130,000 false claims filed in July .
• Illinois identified more than 120,000 counts of unemployment insurance fraud in August .
• Maryland announced 47,000 fraudulent claims had been uncovered in early July .
• Pennsylvania reported that 10,000 prison inmates filed for benefits across the state .
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