Cases of fraudulent unemployment claims have increased exponentially in Kansas and across the United States.
The Kansas Department of Labor says it has stopped more than 45,000 fraudulent claims from being processed in 2020 – with one quarter of the year still to go. Compare that to the previous record of seven cases in a single year.
Peter Brady, deputy secretary for the Kansas Department of Labor, offered his take on what is happening and what is being done to combat the spike in fraudulent unemployment claims.
Brady says scammers are using various schemes to obtain the names and personal information of people who have not lost their job to file unemployment claims through the Department of Labor. In many cases, victims had their information exposed as part of a data breech.
Please understand, these claims are not being filed due to any Syndeo or Department of Labor information being breached.
Anti-fraud efforts through the Department of Labor along with other state and national entities have ramped up in recent months to crack down on fraudulent claims.
“Obviously, we want to devote as much of our resources as possible to protecting the identities of Kansans,” Brady says.
That includes committing additional personnel and financial resources to anti-fraud efforts.
The spike in fraudulent unemployment claims coincides with the rise in the number of people seeking pandemic unemployment assistance (PUA) through the Coronavirus Aid, Relief and Economic Security Act, which was enacted in March 2020 as a way to combat job loss that was triggered by the Covid-19 pandemic.
For months, the PUA program provided up to an additional $600 a week on top of standard unemployment rates for people who were unemployed, reduced to part-time hours or were unable to work due to pandemic-related factors.
The CARES Act also made available unemployment assistance for people who are self-employed, independent contractors or “gig” workers such as Uber or Lyft drivers.
Brady says adding those classifications created an unintended consequence because it greatly reduced the opportunity for claims to be cross-referenced or verified through employers.
“There’s not that check and balance when there is not an employer in the equation,” Brady says.
The Department of Labor implemented a 72-hour hold on all new PUA filings to allow more time to authenticate the claims.
So what should you do if you suspect a claim has been filed fraudulently using your identity?
Brady says alert the Department of Labor to a potential fraud as quickly as possible. He says the organization denies duplicative claims and alerts the person under whose name the claim was filed, which could be a signal that fraud has occurred. The Department of Labor also has discovered fraudulent claims in instances of employees filing an unemployment claim while still employed.
Brady says filling out the form on the website fraudreport.ks.gov is the best and fastest way to trigger a Department of Labor investigation.
Syndeo will assist clients with reporting fraudulent claims by alerting them to any suspicion of fraud. We then connect with our direct contact at the Kansas Department of Labor to flag the case immediately and communicate back to the employee about the fraudulent claim and what they can do to protect their identity.
A claim created using a person’s personal information, such as social security number and/or date of birth could indicate a risk of further financial harm.
The Department of Labor recommends taking the following steps:
- Alerting the three major credit reporting bureaus (Equifax, Experian and TransUnion) and requesting a “fraud alert” on your credit report.
- Contacting your financial institution and credit card companies for their advice on whether accounts should be closed.
- Contacting the Social Security Administration to order a copy of your Personal Earnings and Benefits Estimate Statement (PEBES) to verify the accuracy of your work history on file.
- Notifying the IRS and requesting a copy of your Wage and Income Transcript.
- Filing a report with the Federal Trade Commission.
Additional information, including supplemental websites and phone numbers can be found on the Department of Labor’s anti-fraud page.
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