Can Scammers File for Benefits in Your Name?
Last year alone, almost 400,000 Americans had their identities stolen and used to apply for fraudulent government benefits.
Times of crisis are a breeding ground for new scams. Since the beginning of the pandemic, the US government has lost more than $36 billion due to fraudulent unemployment benefits. But the government isn't the only one who can get scammed by unemployment fraud.
So what happens if someone applies for unemployment benefits in your name?
In this guide, we’ll teach you the warning signs of unemployment fraud and how you can protect yourself from becoming a victim.
What Are Unemployment Benefit Scams?
Unemployment scams — or, unemployment fraud — are when scammers use fraudulent information to avoid taxes and claim benefits they don’t qualify for.
Over the last year, the FBI and state law enforcement have reported a huge spike in unemployment fraud. Organized crime rings have used stolen identities to steal billions from programs like the Pandemic Unemployment Assistance (PUA).
Unemployment scams hurt us all. The more benefits stolen from these programs, the less likely they'll continue, and the harder it'll be to get help when you need it.
How to Find Out if Someone Has Filed For Unemployment in Your Name
If a fraudster steals your identity to commit unemployment fraud, you most likely won’t find out until after they’ve received your benefits. But the sooner you recognize the types of identity theft, the better chance authorities have of recovering the funds.
Here are some of the ways you can find out if someone has filed for unemployment under your name:
- You receive mail about an unemployment claim you didn’t make (this could be from any state).
- You receive an IRS form 1099-G showing unemployment benefits you weren’t expecting.
- While still employed, you get a notice saying your employer received a request for information about an unemployment claim in your name.
- You apply for benefits, only to be told that someone is already claiming benefits in your name.
- You recognize any other common signs of identity theft.
All unemployment scams depend on getting access to your personally identifiable information (PII). This includes your name, address, phone number, credit and debit card numbers, and social security number.
So, how do these thieves get access to your sensitive information?
Scammers impersonate government agencies in phishing emails, text messages, or phone calls. Once you engage with them, they’ll try to convince you to hand over personal information like your SSN, driver’s license, or credit card numbers.
7 Common Types of Unemployment Scams
- Sending phishing emails claiming to be from government agencies
- Using fake text messages to get you to click malicious links
- Posting fake job ads that require personal information to apply
- Calling you and offering to help you file for benefits for a fee
- Stealing your information through paid online surveys
- Creating fake unemployment benefit websites
- Using you as a “money mule” to launder fraudulent benefits
1. Sending Phishing Emails from Fake Government Accounts
One of the most common unemployment scams is receiving a fraudulent email claiming to be from a government account.
Phishing emails copy the look and tone of an official email. But the included links ask you to either hand over personal information or download malware to your device (which can allow them to hack your email). Scammers can even mask the return email address so it looks like it’s coming from the real source.
It’s best practice to scrutinize any email before clicking links or downloading attachments. For added security, click or hover over the sender’s email address to see if it’s from an official “.gov” account.
2. Using Fake Texts to Steal your Information
Unemployment scammers will also target you over text. In a smishing scam, fraudsters send texts claiming there’s an issue with your account that you need to fix immediately or face a penalty.
But when you click the link, they’ll once again either steal your personal information or send you a virus.
For example, one smishing scam told victims they would forfeit their benefits if they didn't click on a link to update their bank account details. Those who clicked on the link had their payment details stolen.
Again, never click on links in texts or emails if you aren’t sure who sent them. When in doubt, go to the agency’s official website and contact them directly.
3. Posting Fake Jobs Ads
Job seekers are prime targets for unemployment scammers.
Fraudsters will post fake ads on social media sites like LinkedIn and Facebook or job boards that offer high pay for minimal work. One common fake job ad involves picking up passengers at the airport for 35 hours a week with a weekly pay that works out to over $100,000 a year.
But all these fake jobs require applicants to submit personal information – such as their Social Security number or ID – in order to apply. Scammers will even create fake company pages to try and trick you using similar-looking URLS. (For example, using an extra “i” in spiiritairline.com)
Again, be diligent about who you give your information. Be especially careful with your SSN as it's not always possible to change your Social Security number, even after identity theft.
If an offer sounds too good to be true, it probably is.
4. Phone Calls Offering to File for Unemployment Benefits
Phone scams have also increased during the pandemic. One especially common scam is when a fraudster offers to file for unemployment benefits on your behalf in exchange for a fee.
Social Security scam calls, for example, may even peddle unclaimed grants or cost-of-living adjustments (COLA). If you accept, the fraudster takes the fee as well as any other personal information you hand over.
5. Stealing Your Information Through Paid Online Surveys
In another type of unemployment scam, con artists will offer payment for completing a survey. But to get the reward, you need to provide your personal or financial information.
These types of attacks are dangerous because we see them as a quick and easy way to make money. Again, if an offer looks especially appealing, do your due diligence first. Someone might be trying to scam you online.
6. Creating Fake Unemployment Benefit Websites
With more people searching for how to claim unemployment benefits, scammers have created spoofed websites to steal your information.
According to the FBI, these websites will use the same name as a government agency, but use misspelled names or URLs. For example, “employ-wiscon.xyz” or “Marylandgov.xzy”.
If you click on these sites, you’ll be prompted to supply sensitive information that can be used for fraud or download malware onto your device.
7. Using You as a “Money Mule” to Launder Fraudulent Benefits
Scammers can’t always directly withdraw the money they’ve received through fraudulent activity. Instead, they rely on a network of “money mules” to launder fraudulent unemployment claims.
If someone approaches you with a quick-money job offer like this, decline and report them to the authorities.
Victim of an Unemployment Scam? Here's What To Do
Most of the time, an attacker has already filed a claim by the time you find out about unemployment identity theft.
Whether you discover this when filing your tax return or after receiving form 1099-G, the first thing you need to do is report the fraud to the state workforce agencies in the state(s) where it took place. (The U.S. Department of Labor has a list of state fraud hotlines here.)
Next, you'll need to notify your employer so that they're aware of the situation.
It’s also useful to file a report with your local police department. This will create a record of the crime, which you can use as evidence that the fraud took place when communicating with the IRS.
At this stage, it’s time to protect yourself from further fraud in case the scammer has used your information elsewhere to steal your identity.
Follow the steps of the fraud victim's checklist. Then, set up a credit freeze to stop scammers from opening bank accounts or taking out credit in your name.
For added protection, you can check your credit report and then set up a fraud alert and identity theft protection to alert you of any fraudulent activity happening in your name.
Identity theft protection services can also protect you if a scammer uses your identity to commit financial fraud. With Aura, you’re covered with up to $1 million in eligible losses due to identity theft.
Finally, if you believe you’ve been the victim of identity theft, file a claim on identitytheft.gov.
How To Avoid Unemployment Benefits Scams
- Be very selective about who you share personal information with.
- Don’t respond to unsolicited emails, SMS, or phone calls related to filing an unemployment benefit claim.
- When applying for benefits or jobs, carefully examine each web page.
- Make sure the URL is spelled correctly and that the site is secure.
- Make sure the page uses “https://” not “http://”.
- Look for the green padlock in the browser bar near the URL.
- If someone contacts you directly claiming to be from a government agency, get their information and validate it.
Fraudsters rely on high-pressure tactics to get you to hand over your information. They may threaten to suspend or withhold payments if you don’t do as they say. Ignore these tactics and take your time to verify their identity and authority. If they’re not who they say they are, report the fraud.
What’s the Punishment for Unemployment Scams?
Anyone who deliberately provides false information to collect unemployment benefits is committing unemployment fraud. This means that unemployment scammers are open to serious criminal and civil liabilities.
While the penalties vary by state, in general, perpetrators will be forced to pay back the stolen funds plus interest (voluntarily or via wage garnishment). They might even be given a prison sentence.
For example, under California law, if a fraudster claimed over $950 in benefits fraudulently, they would be charged with a felony. If the amount was less than $950, they would be charged with a misdemeanor and liable to spend up to six months in jail and to pay a fine of up to $1,000.
The Bottom Line: Unemployment Scams Are Rising
By now, it's clear that identity thieves will capitalize upon any opportunity — even the coronavirus pandemic — to separate citizens from their hard-earned money (just look at how PPP fraud is the biggest fraud of all time).
But while identity theft can happen to anyone, it doesn't have to happen to you.
Prevent identity theft by being proactive and aware of unemployment scams trying to capture your personal information. A bit of due diligence will reduce the chance that someone will make claims under your name.