With more than 38 million people unemployed in the United States right now, according to the Bureau of Labor Statistics, more than a few million people are filing for unemployment benefits.
In the financial sector, when we see a dramatic increase of any kind of financial need—we also see a dramatic rise in a scam that goes along with it.
This spike is no exception: Over 18,000 Americans have lost a collective $13.4 million to coronavirus-related fraud since the beginning of 2020, according to the Federal Trade Commission. Unemployment benefit scams make up a significant chunk of that loss.
This scam is hitting Oklahoma and other states across the nation. Scammers are filing bogus unemployment claims to businesses of all sizes pretending to be a former or current employee. It’s a good idea to be vigilant with your personal data, even if you aren’t expecting to seek unemployment benefits. Employers of all sizes should also be aware of the possibility of receiving unemployment-related scam mailings.
How’d it happen?
With massive and sudden job losses across the country, millions of recently unemployed people were overloading unemployment websites and phone lines, making it easier for scammers to slip through. Some of the usual regulations surrounding unemployment benefits were also waived by the federal government in light of the crisis. These factors combined to make oversight quite a struggle. Without time to investigate each claim, scammers have filled the void.
This scam can hit consumers directly, meaning scammers call or email unemployed people impersonating a U.S. Department of Labor or other governmental agency and pretend to need their personal information. In another scam, the scammer takes someone’s personal information and files a claim with bogus employment information hoping an overwhelmed system can not take the time to properly verify the claim.
At Tulsa Federal Credit Union, we’ve been receiving unemployment claims for people who were never employed with us.
“Several claims have come through our office, and three of them had never worked here.”— Jonna Brakebill, Tulsa Federal Credit Union Human Resources Manager
“We have to then go through the due diligence to see if they worked here and where they worked. It’s additional stress on an overwhelmed system. We’ve seen enough fraudulent claims come through that this prompted us to send out a message to employees. We then learned even more had been impacted.”
Even closer to home, Leslie Runyan, Tulsa Federal Credit Union Chief Human Resources Officer, received an unemployment benefits approval letter in the mail at home despite the fact that she had never applied and was still gainfully employed.
“The fact is I was approved for benefits, and nothing came here for us to respond to,” Runyan said.
What can you do to protect yourself?
Here’s some practical advice on what to do if you want to help stop personal fraud during the rise of this unemployment scam:
1. “Check your mail,” Runyan said. “Be looking for materials sent to you from the U.S. Department of Labor or Oklahoma’s state unemployment office. If you receive anything that makes you think fraud may be occurring, reach out to the concerned agency immediately to determine if anyone may be posing as you.”
2. If you suspect or know you have been a victim to this scam, review your credit. Consider freezing your credit for a period to slow down someone using your personal information, Brakebill said.
3. Remember that filing or qualifying for unemployment benefits is free, Runyan said. If someone is trying to make you pay to sign up or to receive benefits, that’s a sure sign it is a scam, she says.
4. Know that no government official will ask for you to share personal information over the phone, unless a phone appointment was preplanned and scheduled for a specific time, Brakebill said.
5. Verify any web addresses where you enter personal information. Each state will have its own website dedicated to filing and checking unemployment claims. Look for the lock icon next to the URL and for the letter “S” after ‘http:’ in the web address, Runyan said. An https:// web address means that the website is secured properly.
As jobless claims slow and America slowly reopens to return to work, the unemployment insurance program won’t be as overwhelmed and can investigate claims more thoroughly. In the meantime, be vigilant, report any suspicious activity, and don’t share your personal information with anyone until you know it is a trusted party.