Although the pace of layoffs and new applications for unemployment benefits has slowed, fraud attempts have not. Scammers continue to use the COVID-19 pandemic as an opportunity to file fraudulent unemployment claims, often using someone else’s identity. These schemes are widespread and affect most states.
Last year, The Federal Trade Commission (FTC) received more than 394,000 complaints from consumers who said their identities had been “misused” to apply for government benefits, up from only 13,000 reports of this type of fraud made the year before. That’s a nearly 3,000% jump in one year – and it’s only a fraction of potentially fraudulent unemployment claims nationwide, according to various state reports.
How do you know that your identity has been compromised in an unemployment scam? Look out for tax form 1099-G. This form is used to report income from unemployment benefits on your tax return. If you received this form but didn’t claim unemployment benefits, you might be at risk.
By the time you figure out someone has tried to access unemployment benefits using your information, your identity has likely already been compromised. You should assume the scammer has access to valuable personal information such as your Social Security number.
Here are steps you can take if you think you are the victim of unemployment fraud.
- Notify your employer of the situation and report identity theft to the state where it occurred. The U.S. Labor Department recently created website that aggregates individual states’ online reporting forms and other useful email addresses and phone numbers.
- After reporting the identity theft, you need to take steps to bolster your identity. First, check your credit reports. To deter fraudsters from applying for loans or credit cards in your name, you may choose to request a credit freeze or place a fraud alert on your credit reports.
- Continue to keep an eye on your credit reports, bank accounts, mail and email for new financial or personal activity that seems out of place. Using a credit report and identity theft monitoring service can help alert you to possible suspicious activity.