How Unemployment Fraud is Being Committed in 2021

Troubles in America with Unemployment Fraud

Unemployment fraud in the U.S has reached dramatic levels during the COVID-19 pandemic. The labor department estimates that more than $63 billion have been paid unemployment improperly through fraud or errors across the US. In Florida alone, the DEO has paid out nearly $2 billion to criminals. There is currently 271,874 unemployed Floridians that have been locked out of their unemployment benefits due to potential fraud and another 225,706 accounts are currently in hold status.

This has been a huge problem for both the people and government in America. The effects of this issue are being felt at every level for the gain of criminals. Funds are being taken from people who might actually need them forcing states to overspend and the amount given to people in need is reduced since the demand is being artificially inflated.

How is unemployment fraud being committed?

Fraud perpetrators, in China, Nigeria, Russia, and even the USA buy stolen personal information on the dark web and use it to flood state unemployment systems with fraudulent claims. The state is unable to process this high volume of claims and subsequently has become much less strict due to actually needing to disperse funds to those in need.

These fraud criminals are taking advantage of the problems surrounding covid and the crisis occurring in America. Basically, the fraud is committed by stealing peoples identity and using shell companies to fraudulently claim covid relief funds.

How People find out they are a victim of unemployment fraud

Unfortunately, most people do not know they are a victim until it is too late. People typically find out when they receive a call from their employer, benefits related paperwork is sent to them in the mail, or even when they are filing for unemployment and are denied. A taxpayer may also discover the issue after they file their federal taxes, only to be told later by the IRS that they did not report all their income, due to the unemployment claim.

What to do when unemployment fraud happens to you

Reach out immediately to your state unemployment office to report the fraud. If there are unemployment claims in multiple states reach out to each unemployment office individually. If you need to make an unemployment claim but have the fraudulent claim made in your name, you need to work with the department because your claim could be delayed.

Contact your employer if they are not already aware, but in some cases your employer will find out before you do.

How to avoid being a victim of unemployment fraud

Be alert to any suspicious phone calls, mail, email, or social media requesting any personal information. Staying wary of these factors will certainly reduce your risk of being a victim of unemployment fraud.

If your company is partnered with a PEO make sure to contact for help with checking to see if you have been a effected or if you can take any steps to protect yourself.