As our nation’s unemployment rate spiked to unprecedented levels during the Covid-19 pandemic, so too have incidents of unemployment benefit fraud. The sheer number of claims being made by American’s new to the system has put fraud investigators at a disadvantage, and given criminals a weakness to exploit. Would-be fraudsters are filing unemployment claims on other’s behalf and attempting to collect their benefits. Anecdotally, we have been shocked by the number of inquiries we have received about this problem in recent weeks from clients, friends, family members, and fellow employees, and wanted to share this information with our LJAA community so you can protect yourself from this fraud.
If you discover you have been a victim of unemployment fraud, here are a few steps to begin rectifying the situation:
It is imperative to pay attention to any notices that you may receive from the NYS Department of Labor (DOL) or a similar department in your state, as it could affect your livelihood and future unemployment benefits, if ever needed. If you receive a notice, the first step is to alert your employer, and contact your unemployment agency to inform them your unemployment benefits have been compromised. You can do so online in New York by logging into:https://dol.ny.gov/report-fraud. This website will allow you to report the fraud to both the NYS Department of Labor and the Federal Trade Commission (FTC) Identity Theft Division.
Frequently it is your employer who first receives an unemployment notice for an active employee. In that event, your employer should alert you, and should file a Notice of Protest on your behalf to the DOL. We strongly recommend, however, that you also report the fraud yourself by logging in to https://dol.ny.gov/report-fraud.
If your state’s website does not allow you to do so, you should also file a complaint with the FTC online at identitytheft.gov or call 877-ID-THEFT. They can assist with implementing fraud prevention tools, including placing a fraud alert on your credit, pulling credit reports, and closing any fraudulent accounts opened in your name.
If someone is claiming your unemployment benefits, it is likely they have your Social Security Number. To minimize the damage they can do to your financial health, you should contact the three credit bureaus(Equifax, Experian and TransUnion) to freeze your credit reports. You can do this over the phone, or online. The bureaus legally must freeze, and unfreeze, your credit reports for free. Once your reports are frozen, anyone who tries to open an account in your name should be thwarted. But remember: If you want to apply for a loan, or credit card, you need to unfreeze your reports first.
This is a hassle. Each state handles unemployment fraud cases differently, and the FTC recommends you document all confirmation and case numbers, along with the names of who you speak to at your state unemployment agency. Many unemployment departments are overwhelmed with reports of fraudulent claims, and you may encounter long delays to report and process your case. You may also be asked to provide documentation to support your report, which can be time-consuming and add stress to an already stressful situation. Despite the hassle, it is far better to address the situation now: while it is unlikely you would lose out on any benefits as the result of a fraud, failing to address the situation immediately could result in a major delay to your benefits at the time you need them the most!