Watch out for Unemployment Benefits Fraud
According to the U.S. Department of Labor, most victims of unemployment identity theft are unaware that claims have been filed or that benefits have been collected using their identities.
Fraud Manager Lisa Markle found out she was a victim of unemployment identity theft when she received an email from her human resources department. Many people only find out when they receive something in the mail, such as a payment or state-issued 1099-G tax form that’s incorrect or shows benefits not received.
“It’s not as unusual as you might think or hope,” Markle says. “And it can happen to anyone – including the manager of Fraud Investigations!”
According to the IRS, because unemployment benefits are taxable income, states issue the 1099-G tax form to recipients and to the IRS to report the amount of taxable compensation received and any withholding. Box 1 on that form shows "Unemployment Compensation."
The IRS says anyone receiving the form who did not apply to receive unemployment benefits should report fraud to the issuing state agency and request a corrected Form 1099-G. The IRS cautions you not to wait to receive a corrected 1099-G to file your taxes and only include income received.
Fraudsters are using stolen data to apply for benefits and they’re also devising schemes to collect it.
The Department of Justice recently warned that criminals are creating websites mimicking unemployment benefit websites, including state workforce agency websites, for the purpose of unlawfully capturing consumers’ personal information.
“Links to these malicious websites often come from texts or emails,” Lisa explains. “Going to an agency website directly will help make sure members are not handing data over to fraudsters.”
In addition to receiving a 1099-G form, members can know they might be the victim of unemployment identity theft if they received the following:
- •Mail from a government agency about an unemployment claim or payment without having recently filed for unemployment benefits. This includes unexpected payments or debit cards and could be from any state.
- •While still employed, a notice from the employer indicating the employer received a request for information about an unemployment claim in their name.
If members discover someone fraudulently filed for unemployment benefits in their name they can also:
- •Contact the workforce commission in their state. A list is available on the Department of Labor website here.
- •File a complaint with the Federal Trade Commission.
- •Contact the credit bureaus for a fraud alert and continue to monitor credit.
- •File a police report and keep a copy for their records.
- •Contact the Social Security Office and review your statement to make sure no one has fraudulently claimed benefits in their name.
- •File a report with the IRS – Use Form 14039, Identity Theft Affidavit. This type of fraud will impact taxes and could cause you to be audited.
Find out more about what to do if you suspect that you’ve been a victim of fraud here.