Another form of ID theft: unemployment fraud

It is undoubtedly an understatement to say that these are uncertain times. But one of the few things we can count on is that there are people trying to illegally profit from the uncertainty.

Scammers are taking advantage of fears of the pandemic, along with massive unemployment in Minnesota and across the nation, as well as lingering confusion about stimulus checks.

The Federal Trade Commission reported a surge in complaints about ID theft, saying that it got four times as many ID theft complaints in the first weeks of April than it had gotten in the entire first quarter of 2020. One type of identity theft on the rise: unemployment fraud.

Target-rich America

Though the nation is struggling with the pandemic, economic woes and civil unrest, scammers see a target-rich America filled with the millions who received stimulus checks and the tens of millions of workers who have filed unemployment claims in the past couple of months.

Department of Labor Inspector General Scott Dahl says about $26 billion in pandemic-response unemployment benefits will be improperly distributed, with much of it winding up in the hands of fraudsters.

Not the best of times

“About 10 percent of unemployment insurance payments are improper in the best of times,” Dahl said. But he said the extraordinarily large unemployment benefits in response to the pandemic means “the improper payment rate potentially will be much higher.”

As an illustration of the intensity of the problem across the nation, consider this: the CEO of Washington state’s Identity Theft Resource Center said the organization normally receives “very few complaints” about unemployment benefits – normally only 10 such complaints for an entire year. But when the generous pandemic-response unemployment benefits began to be issued, the group received 44 calls in just three days.

Restoring credit and name

Experts say that unemployment fraud is simply a version of identity fraud. Social Security numbers are obtained by the fraudsters, who then apply for unemployment benefits under the stolen names.

Fortunately, there are legal options for ID theft victims enabling them to restore their credit and name.