How scammers are using unemployment claims to cash in
As if losing your job or a string of paychecks during a coronavirus-related furlough isn’t stressful enough, now those who file for unemployment benefits are being warned to watch out for professional crime rings.
And the crooks could create headaches for you, too, even if you’re lucky enough to still be working or perhaps even retired.
Add this to a long list of COVID-19 headaches.
Across the country, consumers are being warned that fraud is on the rise relating to jobless claims. The U.S. Secret Service has already spotted trouble in Florida, Washington, North Carolina, Massachusetts, Rhode Island, Oklahoma and Wyoming.
"It is extremely likely every state is vulnerable to this scheme and will be targeted if they have not been already," according to the Secret Service alert issued May 14.
The alert noted that a significant amount of fraudulent claims have used stolen ID information from school employees, first responders, as well as government employees. It is assumed, according to federal ities, that the ring has a massive database to "submit the volume of applications observed thus far."
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Some data being used might belong to anyone, whether they’re jobless or not. Retirees, for example, report receiving unemployment forms to verify their identity from the state when they didn't try to make any claims recently.
The online con artists claim to be gig workers or self-employed workers in some cases to steal money from the unemployment system.
Unemployment benefits have become particularly lucrative for thieves during the coronavirus crisis. An extra $600 in benefits may be added on top of state jobless benefits for those who lose work because of the COVID-19 crisis under the new federal Pandemic Unemployment Assistance program.
"A Nigerian crime ring is the prime suspect, but doubtless there are others," said Adam Levin, founder of CyberScout, which offers identity theft protection and data security.
"They have motive: financial gain. They have the means: They are experts at phishing attacks and have an international network of money mules who have been laundering money for them for years. "
And Levin suspects that many unsuspecting folks who are desperate for additional work at this moment could be caught in parts of this scheme, too.
On top of that, he noted, jobless call centers in various states, including Michigan, are overwhelmed. Some websites have crashed at various points because of waves of people trying to file claims, get more information or sort out suspicious transactions.
"This scam targets employed and unemployed Americans alike," Levin said.
The losses from these claims are estimated to be in the several hundred million dollar range, according to an alert issued by the Secret Service. The crimes are fueled by data lost in leaks, breaches, phishing attacks and even oversharing on social media.
Is this email from the unemployment office a scam?
As emails popped up in the past few days, some wondered whether they were looking at another potential scam. Why would the Michigan Department of Labor and Economic Opportunity be contacting you about "an international criminal ring exploiting the COVID-19 crisis"? Really? It just sounds so strange.
But it's legitimate.
Some who filed unemployment claims in Michigan began receiving emails May 27 to alert them that more ID verification would be needed, thanks to fears of an online crime spree. Some received letters in the mail prior to the emails being sent.
When you go to the Michigan jobless claims site to apply for benefits, you’re also now alerted that you might be spotting a “Stop Payment” notice on your account.
“There is a rise in unlawful unemployment claims across the nation,” said Steve Gray, the director of the Michigan Unemployment Insurance Agency, in a statement. “And unfortunately, criminals are taking advantage of this global pandemic.”
The crooks already have plenty of stolen personal information, including Social Security numbers, after several major hacking incidents during the past few years.
“Due to largescale fraud attempts against state unemployment programs across the nation,” the Michigan site says, “the UIA has developed additional measures to protect certain claimants by requiring further identity verification and claim eligibility authentication.”
The Michigan Unemployment Insurance Agency is warning residents of the possibility that criminals will file impostor claims. “No personal data from claimants has been stolen from UIA,” according to the Michigan agency.
Many of those who have filed unemployment claims have begun receiving emails from the State of Michigan to require them to verify their identities. People who are filing new claims, as well as those with existing claims, could face this new verification requirement in Michigan, too.
Some people who have already filed claims may have received “Stop Payment” notices on their accounts and now must review instructions that they were sent for how to submit additional information.
“If you received a ‘Stop Payment’ notice on your account, detailed instructions have been emailed and mailed to you on how to submit additional identifying information in order to receive your benefits," the site says. "There is no reason to take further action until you receive the instructions.”
Some banks or credit unions also may place a hold on a customer’s account if the financial institution suspects fraud. Customers need to work directly with the bank if that’s the case.
The Michigan unemployment agency is working with law enforcement to determine the level of fraud there.
The state will temporarily suspend certain payments to prevent fraud when it suspects malicious claims.
Hey, I'm retired, why would I file a jobless claim?
A 74-year-old retiree told me that he received a letter from the Michigan unemployment office this week asking him to verify his identity. He thought it was a scam.
"It looks really official," he said. But he was sure the letter had to be a fraud.
"The last time I filed for unemployment was 1992," he said. He had lost a job at a pet supply store in Pontiac. But he's been officially retired for the past 10 years.
The Pleasant Ridge man asked that his name not be used because he feared that he was already a victim of identity theft.
The letter he received isn't fraudulent. It's an indication that someone has filed a jobless claim in Michigan using his ID information. The state is asking to verify that information by June 4 or the claim will be denied.
What he must do instead is report that a fraudulent claim appears to have been made.
Others are recognizing that phony claims have been made in their names.
On Thursday, Brian Calley, president of the Small Business Association of Michigan and a former state lieutenant governor, tweeted: "Much to my surprise, I opened mail today from UIA indicating that I was approved for unemployment."
Calley added: "Someone had filled in my name fraudulently. Stay alert folks."
Calley told me the letter came to his 真人百家家乐官网网站home address and the small business association also received a notice of the filing.
Even those who aren’t filing for unemployment benefits are being warned to watch out for crooks here.
Another bad sign: People who file for unemployment insurance receive a written “Monetary Determination” letter in the mail, which is titled Form UIA 1575C.
If you receive this form and you didn't file for benefits, you could be a victim of identity theft, too.
And now, you may need to manage the damage, Levin said.
Steps should be taken to monitor your credit report to spot any signs of con artists who may try to open up credit cards using your ID. Use strong passwords when going online. Don't click on any links or attachments unless you can confirm the authenticity of the sender.
You may even want to take steps to freeze your credit so that crooks may not open up new credit cards or take out new loans using your ID.
Levin also suggests that if you learn that you are a victim of unemployment compensation fraud, you might check with your human resources department or your insurer. Many offer services to help victims sort out identity-related fraud.
Contact Susan Tompor via @tompor. Read more on business and sign up for our business newsletter.