Skip to main content

Unemployment fraud is still a concern across the United States, stemming from the significant increase in unemployment rates during the pandemic, there has been a new wave of fraudulent activities related to unemployment benefits being reported in recent months.

What is Unemployment Fraud?

Unemployment fraud is a type of identity theft that involves a criminal filing for unemployment benefits using someone else’s personal information. This includes their name, social security number, and date of birth. These fraudulent claims are often filed online, and the criminals use fake identities to make it difficult to track them down.

According to the US Department of Labor, there were approximately 1.5 million reports of unemployment fraud in 2020 alone, with an estimated $36 billion in fraudulent payments made. This represents a significant increase compared to previous years, with only 1,700 reports in 2019. The pandemic has been a significant factor in this increase, with many fraudsters taking advantage of the relaxed eligibility requirements and increased benefits offered under pandemic-related relief programs.

The impact of Unemployment Fraud

Each state has its own process for submitting and processing unemployment claims. So it is important for HR departments to be educated on how to spot and report fraud and to diligently monitor and confirm the legitimacy of each and every claim. HR should promptly review whether the named applicant for unemployment benefits is a current employee (Likely a fraudulent filing) or a former employee (the employer should contact the former employee to confirm whether the individual filed a claim for unemployment benefits.) Both HR and the affected employee should work together to file a fraud report and follow the guidance at

The impact of unemployment fraud is not limited to the loss of funds for the government and taxpayers. It may also result in significant harm to individuals whose identities have been stolen or who have had their personal information compromised. Victims of identity theft could suffer from long-term financial and emotional consequences, including damage to their credit scores and reputations.

What to do if you become a victim?

To combat unemployment fraud, governments and law enforcement agencies have implemented a variety of measures. These include increased fraud detection software and screening tools, more rigorous identity verification processes, and increased penalties for those found guilty of fraud. In addition, some states have also launched public awareness campaigns to educate citizens on how to protect themselves from fraud and what to do if they suspect they have been a victim.

If you believe that you have been a victim of unemployment fraud, it is essential to act quickly. The following steps can help you protect your identity and prevent further fraudulent activity:

    • Contact your State’s Unemployment Office. If you suspect that someone has filed a fraudulent unemployment claim using your personal information, you should immediately contact your State’s Unemployment Office. They will be able to provide you with guidance on how to report the fraud and take the necessary steps to protect your identity.
    • Freeze Your Credit. Consider freezing your credit to prevent the fraudster from opening additional accounts in your name. You can contact the three major credit bureaus (Equifax, Experian, and TransUnion) to request a credit freeze.
    • File a Police Report. Filing a police report can help you document the fraud and provide evidence to your state’s unemployment office.
    • Monitor Your Credit Report. Regularly monitoring your credit report will help you detect any new accounts or inquiries that were opened fraudulently. You can obtain a free copy of your credit report once per year from each of the three credit bureaus.

What Can Employers do?

Leave a Reply