Unemployment Insurance Fraud
5 Tips to Help You Avoid Becoming a Victim of Unemployment Insurance Fraud
With all of the negative effects of the Covid-19 pandemic, especially the loss of jobs for so many, unscrupulous scammers have found another way to steal your money. As unemployment continues to rise, fraudsters are now stealing your benefits by using unemployment insurance fraud.
It’s actually very easy for them to do. There are thousands of websites on the dark web where cyber criminals are selling your personal information to these fraudsters for a fee. We all hear about data breaches when some company has been hacked and information has been taken.
This is where the personal information usually ends up…on the dark web for sale to whomever wants to buy it. A criminal can buy your name, current address, social security number, family member names, place of employment, driver’s license information – more than enough that a criminal needs.
They now use this information to apply to your state for unemployment insurance benefits. Once the benefits are approved, they are typically paid out on prepaid debit cards for those applicants that have no bank account for a direct deposit.
Once the criminal gets his hands on the prepaid debit card, they have no problem converting the card to cash. Mobile apps are available to help them convert the card to other gift cards, cryptocurrency, money orders, and even making a money transfer.
The North American risk officer for VISA, Michael Lemberger, stated that they have seen a significant increase during July, of fraudulent purchases that were made due to unemployment insurance fraud types of schemes.
He went on to say that these thieves are targeting various state unemployment insurance programs for the specific purpose of finding a gap that can be used to file a false claim. To stop these criminals, it will take the effort of everyone involved, to be super vigilant.
Often times, it’s very hard to see the warning signs that a criminal is at work. However, there are a few more common red flags that we all can look out for:
- You get an offer from someone, or maybe a company, that you don’t recognize, promising you that they can really speed up your benefit payments for unemployment insurance.
- Some, more brazen, and unknown to you, offering you cash if you will give them your personal information. It might surprise you how often this scam works.
- Letters or e-mails advising you that a new account or even unemployment insurance benefits were made using your name. For an upfront fee, they will investigate for you.
To put a stop to your personal information being used for unemployment insurance fraud, VISA recommends that you do the following to protect yourself:
- If you need to file a claim for unemployment insurance, do it yourself by visiting your state’s website. Don’t allow anyone else to do it for you, especially a stranger sending you an e-mail. In that way, if there is an attempt to steal your information, state authorities should be on top of it to notify you of it.
- Keep your personal information secure, both online and offline. There are online tools that you can use to encrypt digital information, especially financial or medical files. When disposing of physical documents, don’t just toss them in the trash. Use a good shredder.
- Be extremely careful with social media and other e-mail scams. The old saying “If it sounds too good to be true, it is.” There are criminals that will guarantee they can get your unemployment benefits faster, or maybe even more, because they know something you don’t.
We all know how important personal hygiene is, especially in this pandemic. But we need to be just as careful with our virtual activities. Never click on an e-mail link or an attachment from someone you don’t know. And even if it is from someone you know, hover over the link and be sure it’s going where it’s supposed to.
Hackers get into e-mail programs and use their contact list to commit their scams. Your personal information is highly confidential, so only share it if it’s absolutely necessary. If you become aware of a suspected unemployment insurance claim, you should do the following.
Contact your state unemployment insurance office immediately.
Contact all three major credit bureaus, Transunion, Experian, and Equifax.
Contact your bank
Contact the Federal Trade Commission (FTC) to see what steps you need to take
Last, but not least, review your credit reports on a regular basis. You’re entitled to one free credit report each year, so take advantage of that.
Consider becoming a member of one of the identity theft protection programs. I belong to one, and they saved me a lot of grief when my identity was stolen from one of the credit bureaus, Equifax, several years ago.
Cyber criminals are becoming more creative as time passes, but if we stay vigilant and take all possible precautions, we can slow them down, and eventually maybe even catch one before they can commit unemployment insurance fraud.
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