Unemployment Scams are Surging Here’s Tips to Keep Yourself Safe

Unemployment Scams are Surging: Here’s Tips to Keep Yourself Safe

Fraudsters Target Pandemic Assistance Programs

Fraudulent unemployment claims filed in the US are surging during the COVID-19 pandemic as scammers take advantage of government unemployment assistance. Scammers are applying for unemployment benefits in victims’ names and getting the cash deposited into their own bank accounts.

Since the onset of the pandemic, more than $89 billion has been paid out in fraudulent claims. Many of the scams target the Pandemic Unemployment Assistance (PUA) program which extends benefits to self-employed and gig workers. Applicants do not need employer verification of their status, making it easier to commit fraud. The passing of the $1.9 trillion American Rescue Plan in March is sparking a new round of these scams.

Vigilance is the Best Defense

A fake claim filed in a person’s name could delay their ability to collect legitimate unemployment benefits. The government could also expect them to pay taxes on the income. Vigilance is the best defense against this kind of scam.

To file unemployment claims, a scammer has to know certain information about a person. To obtain this information, they send phishing emails, create fake state unemployment agency websites, and send malware in texts and emails. Staying smart online can go a long way in preventing these scams.

Signs of Unemployment Fraud

There are several telltale signs which could mean a person has been a victim of an unemployment benefit scam. For example, if someone receives a 1099-G tax form in the mail even if they have not applied for unemployment insurance, they may want to take steps to protect themselves.

A scammer who has filed for unemployment under a false name may have access to other personal information about a victim. If a person believes they are part of an unemployment scam, they should quickly notify their employer and the state. After that it is a good idea to take defensive steps to mitigate the potential risk including requesting a credit freeze, placing fraud alerts on credit cards, and monitoring credit reports for any suspicious activity. These steps may not completely stop scammers, but they could mitigate damage.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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