Fraudulent Unemployment Claims on the Rise
Addressing Fraudulent Unemployment Claims
Fraudulent unemployment claims are on the rise again in New York and other states. The best action employers can take is to prepare your organization before any such fraudulent claim lands on your desk. Educate your workforce about these kinds of problems and encourage them to be alert and aware of the potential situations that can occur. For example, employees may receive a 1099-G tax form for unemployment benefits they didn’t receive, or a monetary determination letter from NYS state stating UI benefits have been approved when they didn’t file, etc. If the employee receives anything like that, they should notify their employer and immediately report to NYS.
Below are some measures individuals affected by unemployment fraud, or other identity theft schemes, are encouraged to take as soon as possible:
- Employees should report UI fraud involving their own identity to NYS Unemployment: https://webapps.labor.ny.gov/dews/ui/fraud/report-fraud.shtm
- File a police report and keep a copy to show to creditors and credit agencies
- Visit https://www.identitytheft.gov/ to report the fraud to the Federal Trade Commission (FTC) and get help with the next important recovery steps. These include placing a free, one-year fraud alert on their credit, getting free credit reports, and closing any fraudulent accounts opened in their name. IdentityTheft.gov also will help individuals add a free extended fraud alert or credit freeze to their credit report. These make it more difficult for an identity thief to open new accounts in their name.
- Change passwords on e-mail, bank and other personal accounts (avoid using the same passwords for multiple accounts)
- Ask credit-card companies, banks and other financial institutions to put a fraud alert on your account
- Consider registering with a credit monitoring site. There are several free ones as well as others that charge fees. Some of the free services include: Credit Karma, Credit Sesame, and CreditWise from Capital One.
Employers should review any NYS Unemployment Notice of Potential Charges (LO 400) received as soon as they come in to make sure there are no irregularities, and also check the monthly NYS Unemployment Notice of Experience Rating Charges (IA 96) for unexpected claims. If you receive a Notice of Potential Charges for an existing employee, check to make sure they didn’t file for a legitimate reason (ex. reduction in hours). If they didn’t, then since there isn’t a place on the Notice of Potential Charges to specify that it is fraudulent, it’s important to return the notice as soon as possible (fax is fastest for those not using NYS SIDES) along with a letter to notify NYS that the claim is fraudulent, the employee is still working and didn’t file, etc. Keep copies for your records including a confirmation of the date/time the fax was sent.
Below are some helpful links with more information for employees and employers:
- Federal Trade Commission (FTC) recommendations for both employees and employers: https://www.consumer.ftc.gov/blog/2020/06/scammer-getting-unemployment-benefits-your-name.
- NYS Attorney General guidance on identity theft: https://ag.ny.gov/consumer-frauds/identity-theft
- Internal Revenue Service (IRS) has issued guidance for taxpayers who were victims of identity theft and received 1099-G: https://www.irs.gov/newsroom/irs-offers-guidance-to-taxpayers-on-identity-theft-involving-unemployment-benefit