More than six million unemployment claims have been filed in Texas since the start of the COVID-19 pandemic.1 Unfortunately, the significant number of claims has also created an opportunity for fraudsters to try to sneak under the radar and obtain unemployment benefits using stolen identities (name, Social Security Number, and employer name, for example). In most instances, these criminals are obtaining the stolen identity information by purchasing the information off the dark web and filing as many claims as possible without even confirming whether the employee currently works for the company. A quick visit to the company’s website could have revealed whether its executive officers are current employees. However, these criminals are not interested in truthfulness; they care only about the quantity of claims they can collect in a short period of time.
Employers are the first line of defense for shutting down fraudulent claims, as unemployment benefits are not approved until the expiration of the employer’s response period (i.e., the period in which the employer can object to the claim for unemployment benefits). Upon receipt of a fraudulent claim, Texas employers should timely object to the Texas Workforce Commission (“TWC”). If they do, the TWC should not approve and pay the benefits and the employer’s unwitting employee will not have to deal with the headache of fixing the tax reporting with the TWC.
If an employer fails to timely respond to a fraudulent claim, the employer’s employee unknowingly involved may receive the following, which likely will startle him or her and cause him or her to reach out to the employer for help:
The employer will then want to do the following:
Keep in mind that identity theft information criminals are using is likely personal information that had been breached previously and is not a result of a new or active breach that must be remedied. Most U.S. individuals may have been impacted by many past breaches, such as Anthem or Equifax, and this data is information that easily could end up for sale on the dark web. Of course, it is a good practice for any employer to review its systems to ensure they are secure.
1 This article discusses fraudulent unemployment claims in Texas; however, fraudulent unemployment claims are happening across the country. As an example, see California’s COVID-19-Related Fraud Updates at https://edd.ca.gov/about_edd/fraud.htm. If an employee is impacted in a state outside of Texas, contact the applicable state agency responsible for unemployment claims.
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