Over the last several weeks, we have continued to see an increase in unemployment fraud claims, specifically in Texas, Connecticut, and Illinois. Rest assured, your unemployment claims manager has not experienced a data breach, but any data breach that exposes sensitive information can lead to an increase in unemployment fraud. It remains important to remain vigilant, keep an eye out for potential fraudulent claims, and understand important next steps for both you and your impacted employee(s).
Fraud Indicators
There are several key indicators that may suggest someone filed for unemployment using an individual’s personal information.
- Either an employee or employer receives mail about an unemployment claim that the employee did not file. As an employer, if you do not show any separation in your HRIS system, it is best practice to reach out to the employee before responding to verify the validity of the claim.
- An employee may file for unemployment benefits, only to be alerted that a claim has already been filed under their name or that their benefits have been exhausted. Much like the situations above, the employee should alert the UI division of the potential fraud issue.
- An employee receives an IRS Form 1099-G showing payment of unemployment benefits in the previous calendar year. These forms are mailed out annually by states prior to January 31 each year. This can be the first indicator of a potential fraud claim.
- An employee may receive a notice from the Attorney General’s office indicating that an overpayment has been identified and they need to repay the overpayment amount. In this case, the employee must report the potential fraud to both the UI division and the Attorney General’s office.
How to Report Unemployment Fraud
Employers who receive a request for separation information for employees who are still active and working must remember that these claims represent potential identity theft. Reach out to your employees to confirm that they did not file for benefits.
When you become aware of a fraudulent unemployment claim, it is important to communicate this to your unemployment claims manager as soon as possible so we can alert the state. Submit relevant information to your claims team via SHIELD or email.
Identity Theft Fraud: Recommended Next Steps
When an individual has been impacted by identity theft, it is important to take urgent action. The following information can be shared with any employee who may be impacted by an identity theft claim, regardless of how they learned of the claim. Advise your employees to take the following steps to ensure they address their unemployment fraud issue:
- Personally contact their state agency to report that their identity has been used to file for unemployment benefits.
- Report the fraud through the Federal Trade Commission (FTC) website.
- Contact their bank and credit card companies to report that they have been the victim of identity theft fraud.
Communicate with the IRS and review the information on Identity Theft Central.- The taxpayer must respond to any IRS notices immediately by calling them directly.
- If an e-filed return is rejected because of a duplicate filing under the Social Security Number, or if the IRS instructs the taxpayer to do so, complete IRS Form 14039, Identity Theft Affidavit. Use a fillable form, print, then attach the form to the return and mail according to the instructions.
- Contact all three credit reporting agencies (Equifax, Experian, and TransUnion) to place a freeze on their credit reports.
About Us
For more than 40 years, 501(c) Services has been a leader in offering solutions for unemployment costs, claims management, and HR support to nonprofit organizations. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy and are committed to providing our clients with customized plans that fit their needs.
Contact us today to see if your organization could benefit from our services.
Are you already working with us and need assistance with an HR or unemployment issue? Contact us here.
The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources. Some information was provided by our friend, Darby Gibson, Client Marketing & Insights Specialist, at Thomas & Company.
(Images by: Frolopiaton-Palm and New Africa)
