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unemployment fraud

Unemployment fraud increasing exponentially

The U.S. Department of Labor’s Inspector General estimated $26 billion in unemployment benefits could end up being pocketed by fraudsters.  NortonLifeLock, which has 4.5 million customers, has seen  a 6,140% spike in the number of unemployment insurance fraud claims from people who requested identity theft restoration services due to fraudsters stealing their unemployment benefits.

Targets of identity theft typically discover the scam when their employers alert them that a claim has been filed in their name despite still being employed.  A letter also may arrive from the state detailing the unemployment benefits, and oftentimes, a debit card is included in the mailing.

Many victims of identity theft won’t realize they have an issue until they start getting 1099 tax forms in the mail for income on unemployment benefits they did not apply for or stimulus money they never received.  Others might not find the fraud until after their taxes are filed and they’re questioned during an audit why unemployment or federal benefits were not claimed.

In Illinois, fraudulent claims are being handled by Illinois Department of Employment Security, or IDESIllinois Attorney General Kwame Raoul recently announced the launch of a task force that will give federal, state and local law enforcement organizations the ability to share resources. The task force will include the state’s IDES, Illinois State Police and Department of Revenue, along with the U.S. Department of Labor Office of Inspector General and the IRS.

How can I spot unemployment insurance identity theft?

  • You receive a debit card or an unemployment insurance letter (UI Finding) and have not filed a claim for benefits.
  • You are notified by your employer that a claim for benefits has been filed when you have not been separated from employment.
  • You attempt to file a claim online and one already exits.
  • You receive IRS correspondence regarding unreported UI benefits.
  • You receive notice of a state or federal tax offset.

What steps should I take if I receive a debit card or a UI Finding letter, and did not file for unemployment benefits?

If you suspect a claim has been submitted using your information, and you have not applied for unemployment insurance benefits in Illinois, take steps as follows:

Questions? 

Contact your Warady & Davis advisor at 847-267-9600; info@waradydavis.com. You can also visit the Warady & Davis LLP COVID-19 Resource Center for a wealth of information on stimulus assistance, new legislation and much more.  This information is updated regularly.

SOURCE: Illinois Department of Employment Security
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