Imagine applying for unemployment benefits only to be denied because…you are already receiving them. Or getting a letter saying you’ve applied for unemployment when you still have a job. It’s happening to ID theft victims around the country as organized crime rings exploit a “perfect storm” that matches a deluge of applications, overworked government officials, old computer systems, and efforts to get out-of-work Americans the aid they need as quickly as possible.
“We’ve received more complaints in the first two weeks of May than we received all last year regarding unemployment benefits fraud,” said Eva Velazquez, CEO of the Identity Theft Resource Center. “And not by a small amount, by an exponential amount.”
The fraud is so dramatic in Washington state that officials there temporarily suspended their unemployment program after discovering $1.6 million in fraud, according to the Seattle Times. A Secret Service memo read by The New York Times indicated that Washington was a particular target — perhaps because it has generous benefits — but other states have been hit, too, including Florida, Massachusetts, North Carolina, Oklahoma, Rhode Island and Wyoming.
The identity thieves are armed with a host of personal information that allows them to successfully navigate benefits systems, sometimes with systematic precision. At Western Washington University in Bellingham, Wash., more than 400 out of about 2,500 total employees have been targeted with fraudulent claims, Paul Cocke, the university told The New York Times.
Victims who need unemployment are facing a red tape nightmare, Velasquez said. State offices are already behind processing applications. It can be nearly impossible to contact an agency and request an investigation into an ID theft incident.
“This is heartbreaking …. people are really, really distraught,” she said. “There isn’t an end in sight for when they are going to receive those benefits.”
Security journalist Brian Krebs reported that bank investigators believe a well-organized Nigerian fraud ring is behind the crimes. Many are directing unemployment benefits out of state, he wrote.
“While it might seem strange that people in Washington would be asking to receive their benefits via ACH deposits at a bank in Oklahoma, Dodd said the people involved seem to have a ready answer if anyone asks: One common refrain is that the claimants live in Washington but were riding out the Coronavirus pandemic while staying with family in Oklahoma,” Krebs said.
There aren’t great tools for consumers to fight unemployment ID theft, or to recover from it. A credit freeze won’t stop it and credit monitoring won’t alert victims, as unemployment benefits applications don’t trigger a credit check. That means checking your credit report won’t help you discover the crime, either. And there is no central clearinghouse for victims to see if their personal information has been used to apply for government benefits or credentials. Instead, victims must contact each agency individually and work through the issue.
“Victims of all types of ID theft need to go back to the source where the fraud occurred and remedy it with those entities,” Velasquez said. “It makes for an arduous process in normal times, but because of the number of people needing assistance, the process is taking even longer.”