Unemployment benefit fraud jumps nearly 3,000% during pandemic

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MYRTLE BEACH, S.C. (WBTW) — The number of scammers targeting unemployment benefits continues to skyrocket. While the pace of layoffs and new unemployment benefit applications has slowed down, fraud attempts have not.

According to officials, unemployment benefits fraud jumped nearly 3,000% in 2020 compared to 2019.

The Federal Trade Commission reports nearly 400,000 complaints from consumers saying their identities had been “misused” applying for unemployment government benefits. According to an April report, most were fraudulent unemployment benefit claims.

In 2019, there were only about 13,000 fraudulent claims.

The nearly 3,000% jump over one year, officials say, is only a fraction of fraudulent unemployment claims nationwide.

“The fraudster will have either a bank account they control or the fraudster is opening up bank accounts in the names of their victims and depositing the funds they got from the state into those accounts and then stealing the money,” technology professional Naftali Harris said.

Millions filed for unemployment benefits for the first time, leaving some states overwhelmed.
As a result, security experts say many lacked in the identity verification process.

Here’s how it can happen.

Someone steals an identity, claims to be that person, and reports they have been laid off. The state signs off on eligibility for unemployment benefits and deposits the money.

The scammer may have either a bank account they control or open one up in the name of their victims. That’s when they would deposit funding from the state, then steal their money.

Technology professionals, there are a couple of things you can do to avoid falling into the trap.

“If you get a 10-99 G in the mail, that’s supplemental insurance, and if you see one of those and did not apply for unemployment insurance, first— don’t pay taxes on it because you didn’t receive any of the money. Go reach out to the state and unemployment insurance and sort out the issue,” Harris said.

According to the Identity Theft Resource Center, more than half of fraud victims have not successfully resolved the issues.

For help with unemployment-related identity theft, click here.

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