Fraud Hits the Unemployment World Hard

Compliance Connection

Fraud Hits the Unemployment World Hard

December 10, 2020

 

Many employers and employees alike face challenges due to COVID-19 including filing for unemployment and responding to those claims.  Now, we face a new threat and must face it together.

 

Various states experience high numbers of fraudulent unemployment claims and for some states, this number is well over 100,000.  If the average claim is $15,000.00, that could be a cost of over $1.5 Billion.  Often, the employee and/or employer realize this occurs only after the claim is paid or will find out when they file taxes next year and the income is reported by the IRS.

 

In the past, some employers have not paid much attention to unemployment claims when they are filed and consider them a business nuisance.   However, with this increase in fraud, companies need to pay attention.  Otherwise, their unemployment premiums may skyrocket.  Just think about the impact on your organization if your claims increase by $150,000 (10 fraudulent claims paid at the average of $15,000).

 

Employees may experience issues if they try to file a legitimate claim because the funds allotted may already have been paid.  Further, with the overwhelming number of fake claims, states experience astronomical numbers of claims to investigate which slows their response time down when an employee notifies them of a falsified claim.

 

So, what are we to do as a team? 

 

Inform your employees to be watchful of the signs that a fraudulent claim has been filed:

  • Paperwork received in the mail from the Colorado Department of Labor & Employment (CDLE) or other state entities.
  • Receipt of bankcards or visa cards such as a U.S. Bank ReliaCard (may be mistaken as a stimulus payment).
  • Be cautious if someone representing a business requests personally identifiable information such as your social security number, bank account information, passwords, place of employment, etc.

If employers or employees suspect fraud:

  • Regularly review your credit report from all three (3) credit bureaus (contact information is below).  You may want to utilize a free credit report service such as Annual Credit Report.
  • Report any suspicious calls requesting personal identifiable information.
  • Alert your employer and the state if you receive any suspicious paperwork from the state.

If an employee is a victim of fraud:

  • File a police report that has jurisdiction over your residential area.
  • Submit a fraud report by clicking on this link:  REPORT FRAUD.
    • For information on how to complete this form, click here.
  • If you receive a bankcard, deactivate it and contact the issuing bank if you receive a bankcard.
  • Contact the three (3) major credit bureaus and inform them of the possible/real fraud.
    • Equifax: 1-800-525-6285
    • Experian: 1-888-397-3742
    • TransUnion: 1-800-680-7289
  • Report the fraud to the Federal Trade Commission (FTC) by clicking here.
  • Review the FTC website for additional guidelines on how to recover from identify theft by clicking here.
  • Keep track of all of your documentation regarding this claim for future reference.

 

 

We can help!

We realize how overwhelming human resource departments, finance departments, and business owners are with everyday operations let alone dealing with these fraudulent claims.  If you are interested in receiving assistance with this or any other human resource related issue, please do not hesitate to contact us at www.lighthousehrs.net or office@lhrs.net.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Disclaimer:

Lighthouse HR Support (LHRS) provides practical human resource information and guidance based upon our knowledge and experience in the industry and with our clients.  LHRS services are not intended to be a substitute for legal advice.  LHRS services are designed to provide general information to human resources and/or business professionals regarding human resource concerns commonly encountered.  Given the changing nature of federal, state and local legislation and the changing nature of court decisions, LHRS cannot and will not guarantee that the information is completely current or accurate.  LHRS services do not include or constitute legal, business, international, regulatory, insurance, tax or financial advice. Use of our services, whether by phone, email or in person shall indicate your acceptance of this knowledge.