Beware unemployment fraud

Finance
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If you receive an unsolicited check for unemployment insurance, do not cash it.

Nigerian scammers have let loose a barrage of attacks on Americans, with so many of us needing and seeking help due to unemployment. They steal your identity from third party sources and then apply for unemployment payments in your name, using direct deposit to route the money into accounts they control. Another aspect of their scam goes into effect when a paper check is sent instead of direct deposit.

The Secret Service has eyed a “well-organized” Nigerian fraud ring “exploiting” the COVID-19 crisis to commit large-scale fraud on state unemployment programs. An ongoing investigation has been launched to stop the fraudsters and recover the lost money. The Secret Service is one of the agencies involved in the investigation.

“Criminals will use stolen personally identifiable information to file fraudulent state unemployment claims,” according to a Secret Service spokesperson. “Crooks will then use social engineering techniques to recruit unsuspecting individuals to launder illicitly obtained funds in order to conceal the identity, source and destination.”

According to state and federal authorities, the perpetrators are targeting Pandemic Unemployment Assistance, which offers benefits to individuals who would not normally be eligible for unemployment, but have had their livelihoods impacted by the coronavirus.

There is evidence of unemployment fraud in North Carolina, Oklahoma, Wyoming, Massachusetts, Rhode Island, Pennsylvania, and Florida, a Secret Service memo said. The Secret Service estimates losses in the hundreds of millions. Banks at all levels — local, credit unions, and national banks — have all been targeted.

This fraud has been particularly prevalent in the State of Washington, but it is breaking out in many states struggling to keep up with the massive, ongoing, new unemployment filings.

As just a single example of many, here is a link to the State of Washington’s unemployment fraud web page:

State of Washington unemployment benefits fraud

I am seeing the usual warnings to keep a sharp eye on your credit report in the wake of this scam. Am not quite certain how this would be picked up on a credit report . . . but maybe. In any event, already have posted about obtaining frequent credit reports here:

Obtaining multiple credit reports free and frequently

ETA

There are so many Americans applying for unemployment insurance payments today, with many of the applications being made online. Apparently the fraudsters have also created phony “apply for unemployment insurance here” websites in order to steal unwary applicants’ personal data and direct the unemployment benefits payments to themselves.

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It’s easy to see how social engineering could be used to file fraudulent unemployment claims but I’m curious about why they’d mail me an unsolicited check and how that’d be of any use to them. Do they in turn contact the recipient with a sob story that they received someone else’s check by mistake? Or do they use willing accomplices with addresses in the US to split the fraudulent checks?

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I was unclear on that also. But I think both of your methods are possible.

What’s not possible is for me to be able to think like a Nigerian crook. Those folks are WAY ahead of me when it comes to such things! They are in “a league of their own”. :wink:

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Someone I know on FB had this happen to her in WA state. They suggested that everyone go and create an account at their state unemployment web site so that way someone can’t create a new account with your information. In WA they said you can create an account but just never file a claim. Not sure if this works in other states but I had to use unemployment in NJ 2 years ago so I already have an account. Was thinking about setting one up for wife but haven’t yet.

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https://www.seattletimes.com/business/economy/washingtons-unemployment-fraud-may-have-hit-650-million-state-recovers-333-million/

Estimated $650M in fraud with $333 million recovered. The fraud amounts to “as much as one of every $8 paid in benefits”

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Update

It’s becoming even worse. The criminals are overwhelming the system. Many unemployed Americans are being harmed.

Here is the latest:

Unemployment fraud is growing and becoming even worse

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I’m so far behind in the topic of Unemployment Insurance.

I was talking to my Grand Daughter in law this past weekend. She is collecting UI since she was laid off at her job. She loves it… (Unempl Ins). She applied on line & gets her payment by direct deposit. She said it will expire soon. :cry:

I remember many, many, many years ago I collected UI. It wasn’t easy then. Stand in line, go out & try to find a job, proof of looking for another job, nothing was just handed to you. Times a changing!! :face_with_raised_eyebrow:

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I think we should do away with socialist programs like unemployment insurance. That’s what your emergency fund is for. No need for the federal government to sponsor laziness and/or inadequacy, right? :wink: That way, no fraud either. Problem solved.

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Usually you do still have to look for work for unemployment. Seems they waived the job hunting requirement temporarily during the COVID19 shutdowns. Given that most businesses were shutdown it would be kind of impractical to do any job huntin.

The amount of unemployment with the extra $600/week is unprecedented and its NEVER been that generous.

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In CA, you had to certify every 2 weeks that you were looking for jobs and that you weren’t taking classes, etc. It’s kind of stupid, I could have used some of that time to gain skills, but I wasn’t going to DQ myself from benefits.

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That would have messed me up badly back during my own UI days. It was so long ago it is honestly difficult for me to remember clearly. But I’m pretty sure I was in grad school at the same time I was collecting UI. The graduate degree I ultimately received kept me off UI for the remainder of my life, and was a big part of my ticket to success.

Again, my memory is dim to virtually nonexistent. But I’m fairly certain there was no prohibition against obtaining additional schooling when I was on UI. I have no recollection that I was breaking any rules.

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I dont’ know exactly how it works, but from their online information it doesn’t seem that simply being a student or taking training absolutely bars you from getting UI.

They do ask if you started taking classes :

“Did you begin attending any kind of school or training? - Answer “yes”
only if you began attending school or training in that week. Afterwards,
answer “yes” only when a new term begins or you start new classes during
one of the weeks. Since attendance in school or training may affect your
eligibility for benefi ts, an interview will be scheduled to determine your
continued eligibility.”

It says it “may” affect your eligibility.

Theres several logical reasons why you’d not want to give UI to people in school. If someone is in school full time then they are not really legitimately “available” to work full time. yeah I know some overachievers might think they can do FT school plus 40hrs work a week but no. Students often receive government aid. We wouldn’t want to be paying someones tuition and giving them UI while they don’t actually work. State programs exist to supplement training programs to help people retrain so they can reenter the workforce and we wouldn’t be paying for retraining and UI both.

Doing something like what Shinobi did continuing the PT night classes you were previously taking before you lost your day job is a different situation. And I see no reason to not pay UI there.

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I wasn’t going to take any changes to DQ my UI payments because I enrolled in classes to gain knowledge / improve resume. It makes sense that pre-existing education enrollment would be an exception.

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Yeah I’d be hesitant to start school not knowing how it might impact the UI too.
The state websites for UI that I’ve been looking at are not very clear / straight forward/ user friendly from either.

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Data point. HR from my employer notified me a couple weeks ago that I was a victim of UI fraud (WA state). They received a claim on my behalf and notified the UI office that it was a false claim. I’ve been employed full time through the shutdown, working for an essential business.

I also notified the UI office of the fraudulent claim (per recommendation of HR) and the UI office removed the claim from my account and said they are investigating the fraudulent activity.

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Sorry to hear this happen to you.
Just for general knowledge… was there any evident way the fraudsters knew your name, place of employment, and other ID info?

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No clue as to how they may have acquired my info. I checked prior and don’t believe my data was compromised from the 2017 Equifax breach.

I suspect the perpetrator was likely the African fraud ring that stole between $550-$650 million in WA state UI benefits. Though as of June 4th, it is reported WA state had recovered $330 million of the stolen money.

The process was painless for me and took only a couple of minutes to report the fraud online to the ESD.

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