With the economic impact of COVID-19 causing an unprecedented increase in unemployment insurance claims over the past few months, reports of identity theft are rampant.
Fraudsters are using personally identifiable information of identity theft victims who have not filed unemployment claims. Some people learn about the fraud when they receive a notice from their state unemployment benefits agency or their employer about their alleged application for benefits.
Although fraudulent unemployment payments are typically deposited to accounts fraudsters control, they sometimes are sent to legitimate accounts.
If you didn’t file a claim and suddenly notice that you’re receiving payments into your account, chances are that a scammer has filed a claim on your behalf and is starting a scam to get you to redirect your payments to them.
They commonly pose as your state unemployment agency, indicating that the payments were sent by mistake, and threaten legal action if you don’t “return the money.” They may ask you to send the money via a wire transfer or credit card payment or load money on gift cards. Other scammers direct you to a bogus web site where they ask you to provide your bank account number and personal information.
Don’t fall for these scams.
Should you discover that you’re a victim of unemployment claim fraud, it usually means that someone has stolen your Social Security number, date of birth, and other personal information usually required to make claims and set up financial accounts. It’s up to you to report this fraud and take steps to stem future damage.
Report the fraud to your former employer
Even if you’ve been laid off, it’s important to let your former employer know that you’ve been a victim of fraud, since they usually pay for unemployment insurance. Letting them know will also help protect your reputation if your state needs to contact your former employer to discuss your situation.
Report the fraud to your state unemployment benefits agency
Most states let you fill out online fraud reports that save you time and are easier for the agency to process. Make sure you print out any confirmation you receive. If you discuss your situation with an agency representative be sure to keep records of who you contacted and when, as well as any case numbers.
State agencies will never send you texts or emails demanding repayments for these fraudulent payments. If you do receive any kind of repayment-related communications from your state, make sure you call them to verify that these communications are legitimate.
Click here to find your state’s unemployment fraud reporting resources.
Safeguarding your credit integrity
If you’ve ever been the victim of any kind of financial fraud, or believe you might be at risk, it’s critical for you to take steps to protect your credit reputation.
- Visit the Federal Trade Commission’s IdentityTheft.gov website to place a free, one-year fraud alert on your credit, request free credit reports, and close any fraudulent accounts that may have been opened in your name. The site will also help you add a free extended fraud alert or credit freeze to your credit report, making it more difficult for an identity thief to establish new accounts.
- Check your credit reports for free through AnnualCreditReport.com. This can help you recognize signs of fraud.
- Notify your bank and other financial institutions. If you have an online account, change your passwords frequently.
Work with your financial advisor to protect your investment accounts
If you work with an financial advisor, make sure they’re aware of this situation, since fraudsters may try to use your personal information to access your investment accounts. Depending on how your accounts are set up, you may be able to place some or all of the following security protections:
- Hard restriction: All money movement out of the account is stopped, including systematic withdrawal plans. Trades within the account are permitted.
- Passphrase: If someone claiming to be you calls the service center for your account, the caller is required to provide a passphrase you’ve created, in addition to answering normal identification verification questions, before proceeding. You’ll need to use this passphrase as well when you call.
- Two-factor authentication. With this added layer of protection for online accounts, whoever tries to log into your account will need to enter a one-time password that is sent either to your email address or as a text to your phone before they’re given access.
Your advisor should be able to work with you to set up additional security measures to make sure any requests are coming from you.
Joelle Spear is a financial advisor and Partner located at Canby Financial Advisors, 161 Worcester Road, Framingham, MA 01701. She offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. She can be reached at 508.598.1082 or [email protected]
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