Even before the Coronavirus pandemic, unemployment benefit scams were already a major problem costing the states and federal government billions of dollars each year. Part of the problem is that the federal government requires the states to pay claims within a few weeks even if the employer has not responded to confirm that the applicant for unemployment benefits is indeed eligible for those benefits. As with so many identity theft crimes, this one starts with the theft of someone’s Social Security number. Armed with that ammunition, the identity thief then applies on line for unemployment benefits, which are often paid before the legitimacy of the claim is confirmed. In this way, this crime is similar to income tax identity theft where the IRS often pays out bogus refunds before comparing the W-2s and 1099s submitted by employers with the information submitted by the identity thief filing the phony tax return. The payments are generally made by debit cards or direct deposit into bank accounts controlled by the identity thieves which make this crime simple to accomplish.
More than thirty- six million people have recently lost their jobs due to the Coronavirus pandemic leaving state unemployment offices often overwhelmed in dealing with new applications. Many states do not have the proper controls in place to properly screen applications and other states may be not be as stringent in following their own rules in an effort to speed up the sending of funds to needy applicants for benefits. A recent private memorandum from the Secret Service indicates that a sophisticated fraud ring based in Nigeria is using stolen Social Security numbers and other personal information to file phony applications for unemployment benefits in large numbers in Washington, Florida, Massachusetts, North Carolina, Oklahoma, Rhode Island and Wyoming and it can be expected that this scam will be spreading to other states as well. According to the Secret Service, “a substantial amount of the fraudulent benefits submitted have used Personal Identifying Information (PII) from first responders, government personnel and school employees.” The potential losses to this scam are estimated to already be in the hundreds of millions of dollars. In many instances, according to the Secret Service, the scammers are having the unemployment payments sent to the accounts of “mules” who are people acting as intermediaries who then forward the funds to the scammers as a way of laundering the illegally obtained funds. Sometimes the mules may be unwitting accomplices who are victims themselves of romance scams and forwarding the money to people they think they are having a relationship with. Other times the mules may have answered an advertisement for a work at home job in which they are told a part of their job is to forward funds sent to them.
If you are still employed, but have received letters or other communications from your state’s unemployment office, your identity may have been used in this scam and you should report this to your state’s unemployment office right away. Additionally, if you have been a victim of this scam, your Social Security number is in the hands of a criminal. It may be used for other criminal purposes so you should get a copy of your credit report from each of the three credit reporting agencies to look for any irregularities and you should freeze your credit if you have not already done so.
Here is the link to use to get a free copy of your credit reports https://www.annualcreditreport.com/index.action
To get the maximum protection from identity theft, it is important to freeze your credit at each of the three major credit reporting agencies. Here are links to each of them with instructions about how to get a credit freeze:
Once you have frozen your credit, be sure to keep the PIN and information on how to unfreeze your credit report in a safe place.
I also urge you to regularly go to the website https://haveibeenpwned.com/ where you can insert your email address and find what data breaches may have compromised your information.
In addition, don’t unwittingly become an accomplice to this crime. Work at home scams in which you are asked to receive money and send it on to someone else are always money laundering scams.
For those of you receiving the Scam of the day through an email, I just want to remind you that if you want to see the ever increasing list of Coronavirus scams go to the first page of the http://www.scamicide.com website and click on the tab at the top of the page that indicates “Coronavirus Scams.”
If you are not a subscriber to Scamicide.com and would like to receive daily emails with the Scam of the day, all you need to do is to go to the bottom of the initial page of http://www.scamicide.com and click on the tab that states “Sign up for this blog.”