Along with the rise in unemployment insurance claims associated with the coronavirus pandemic, there’s been an increase in fraudulent claims as well as other instances of fraud and identity theft.
Brian Krebs, a security news researcher, reported criminal organizations recruited unemployed people to receive direct deposits from fraudulent transactions and then forward the bulk of illicit funds to perpetrators. According to the Department of Labor, the cost to companies and workers could reach
$26 billion. Without stringent checks and balances, such unemployment programs as Pandemic Unemployment Assistance could be exploited.
Many states experience hundreds of thousands of these claims, and Colorado is not immune. To date, the Colorado Department of Labor and Employment (CDLE) has prevented more than 800,000 fraudulent claims and a total of about $7 billion in unearned benefits. Here in Mesa County, some employers have experienced more than 100 claims. Since the average claim comes in at $15,000, the company could face increased premiums as a result.
Businesses definitely need to watch unemployment claims. If employers receive notification an employee filed for unemployment when they’re still working, they must investigate this claim and not accept it at face value. Follow up with each employee, whether currently employed or no longer with the organization, to determine if they actually filed the claim. If the claim is fraudulent, report it to the CDLE and inform the employee they must take action to protect their identity.
Employees sometimes receive warning signs a fraudulent claim exists before the employer finds out. Regardless of who learns first, certain steps must be taken by the employee. Here are some specific steps employers should share with employees to mitigate some of the effects that could result from fraud, including other forms of identity theft or paying taxes on benefits they didn’t receive.
Be aware if you receive paperwork from the CDLE, a bank card such as the U.S. Bank Reliacard or 1099-G tax form indicating you received benefits for a claim you didn’t file.
If an employee suspects fraud or receives these items, they should submit a fraud report online at
https://cdle.colorado.gov/fraud-prevention and click on the “submit a fraud report” option.
If you received a U.S. Bank Reliacard, deactivate it by contacting U.S. Bank at (855) 282-6161 or (877) 595-6256. If you receive other bank cards, contact the institution immediately to report it as fraud.
If you received a 1099-G tax form, but did not request benefits in 2020 or received a 1099 with incorrect information, visit https://cdle.colorado.gov/tax-form-1099-g for more information.
In addition, the following steps offer some protection for continued identify theft:
Never give out personally identifiable information over the phone. The CDLE will never contact you and ask for your Social Security number, bank account numbers, personal identification number, account passwords or any other personally identifiable information.
Contact the three consumer credit bureaus and put a fraud and identity theft alert on your name and Social Security number. It could be an automated system, so you might not talk to a live person. You’ll have to enter your Social Security number and date of birth. Contact Equifax at (800) 525-6285, Experian at (888) 397-3742 and TransUnion at (800) 680-7289.
You can also report identity theft to the Federal Trade Commission at identitytheft.gov. The FTC website includes resources about how to recover from identity theft and protect your identity.
Create a file to keep records relating to identity theft in one central place in case you’re notified of other fraud or breaches of your personal information.
It’s important to take action immediately to stop fraudulent claims. While the claim itself typically causes no harm to an individual’s credit, other outcomes could occur. If an employee truly needs to file a claim, they could discover their benefits have been exhausted. Employers can’t afford increased premiums based on benefits paid to criminals.