{"id":27346,"date":"2024-04-26T13:39:48","date_gmt":"2024-04-26T21:39:48","guid":{"rendered":"https:\/\/www.spokeo.com\/compass\/?p=27346"},"modified":"2024-04-16T13:40:42","modified_gmt":"2024-04-16T21:40:42","slug":"unemployment-identity-theft","status":"publish","type":"post","link":"https:\/\/www.spokeo.com\/compass\/unemployment-identity-theft\/","title":{"rendered":"Unemployment Identity Theft: The Biggest Fraud Ever?"},"content":{"rendered":"\n

There are many ways to find out that you\u2019ve been the victim of identity theft, and none of them are especially pleasant. Being denied a benefit you\u2019re entitled to receive at a time when you really<\/em> need it is arguably one of the worst. That\u2019s what happens if you\u2019ve been the victim of unemployment identity theft.<\/p>\n\n\n\n

Scammers have made fraudulent claims for years on a smaller scale. Still, the massive job losses caused by COVID – and the corresponding rush to extend benefits to everyone affected – created something of a \u201cgold rush\u201d for criminals. Here\u2019s how to know if you\u2019ve been affected and what you can do about it. <\/p>\n\n\n\n

How Unemployment Identity Theft Became a Crisis<\/h2>\n\n\n\n

Statistics from the United States Sentencing Commission<\/a> (USSC) show that government benefits fraud had been trending downward before the pandemic arrived. Then COVID created a \u201cperfect storm\u201d for benefits administrators – an unprecedented number of people needing benefits in a hurry and an unprecedented influx of money to distribute – whose procedures and computer systems were utterly unprepared for claims on this scale.\u00a0<\/p>\n\n\n\n

The whole situation was catnip for scammers, who have ready access to a lot<\/em> of sensitive personal information through the shady marketplaces of the so-called Dark Web<\/a>. Some of it comes from one-at-a-time scams involving individual victims and much more from wholesale data breaches affecting large institutions<\/a>, but the end result is the same. For a pittance, criminals can buy enough information to make a claim for employment benefits in someone else\u2019s name.\u00a0<\/p>\n\n\n\n

Criminals taking advantage of the opportunity<\/a> range from individual small-timers to massive international criminal cartels, and the numbers are staggering: the Department of Labor estimates that over $87 billion<\/a> may make its way into the hands of criminals before the crisis subsides. One outside expert<\/a> told investigative journalists from ProPublica that this official estimate understates the problem and that the true tally could run into the hundreds of billions. Even the lower figure is startling, and the higher one represents a massive blow to the national budget.\u00a0<\/p>\n\n\n\n

How to Know You\u2019re a Victim of Benefits Fraud<\/h2>\n\n\n\n

The most obvious – and painful – way to learn that your identity has been used to claim benefits fraudulently comes when you apply for benefits yourself and are refused. That\u2019s a very bad day even if you have<\/em> healthy savings and some unused credit, and downright calamitous if you don\u2019t. <\/p>\n\n\n\n

You may also receive letters from your state\u2019s unemployment benefits program advising you that your claim is being processed when you haven\u2019t in fact filed a claim. Another unpalatable possibility is that you\u2019ll get your 1099 for the year, and find that you\u2019re being asked to pay taxes on thousands of dollars in benefits that were fraudulently claimed under your name. <\/p>\n\n\n\n

Even if you\u2019re currently employed or have the resources to ride out the (unpredictable) wait to get your situation resolved, this scenario should concern you. On a personal level, a claim being made in your name means your identity has been stolen. That can go two ways: badly or very<\/em> badly. On a broader level, you\u2019re affected even if your own identity hasn\u2019t been compromised. Everyone will pay – one way or another – for the massive quantity of tax dollars lost and the resulting societal impact of benefits being denied to people who really need them. <\/p>\n\n\n\n

What to Do About Benefits Fraud<\/h2>\n\n\n\n

If you learn that you\u2019ve been the victim of unemployment identity theft, there are several steps you should take to set things right. The Department of Labor\u2019s new Report Unemployment Identity Theft<\/a> site provides a useful guide to those first steps, so that\u2019s probably where you should begin.\u00a0\u00a0<\/p>\n\n\n\n