Increased Unemployment Insurance Fraud Noted on COVID-19 Claims

The U.S. is Seeing a Spike in Fraudulent Unemployment Claims

As of May 14, a report from CNBC tallied up unemployment claims since early March and reported that nearly 36.5 million Americans have filed for unemployment due to COVID-19. The increased need and the new opportunity for self-employed individuals to file for unemployment insurance under the CARES Act has contributed to an environment that fraudsters are taking advantage of. As a result, the Department of Labor (DOL) recently issued a fraud alert for consumers nationwide. 

Filing for unemployment with stolen identities is not a new phenomenon. However, state unemployment agencies are reporting significant upticks in fraudulent claims. They are having to juggle unprecedented claim volume with the time needed to validate claims — and quickly deliver benefits.  

For Employers: If you Receive a Fraudulent Claim…

It is a potentially fraudulent claim if the person filing is not an employee of the company, or is still actively employed with your organization. The Equifax Claims Management team recommends that organizations inform affected employees and encourage them to follow the steps below. For claims made by individuals who are not employees of your organization, the employer should still respond to the claim by the state deadline, advising the state of the facts in the claim response. Then, employers should follow the state-specific procedures for reporting fraudulent claims using the Department of Labor’s employer fraud contact information.   

For Employees: If you Suspect you are a Victim of Unemployment Fraud…

Workers who find themself the victim of an impostor UI claim can  follow the below steps. These steps are for the impacted individual only (not the employer). That’s because only the employee will be able to provide the necessary information. 

• First, report the incident to https://identitytheft.gov/ which is managed by the Federal Trade Commission.
• Second, contact his/her local police department and file a report (when possible).
• Finally, report the incident to the state in which the impostor claim was filed. The Equifax Unemployment Claims Management team has compiled state-by-state guide for quick reference.

For additional resources related to unemployment claims for employers, Tips for Interpreting the New Unemployment Landscape.  Additionally, download a playback of our recent webinar covering the unemployment elements in the CARES Act, Interpreting the New Unemployment Laws.