Federal and state authorities are warning that unemployment benefit fraud is on the rise amid record-high jobless claims filed during the COVID-19 pandemic.
Spurred by the economic fallout from pandemic-driven lockdowns, a record 40.767 million Americans have filed jobless claims since March 21. The unprecedented volume of claims gives criminals more opportunities to act and deceive.
State unemployment offices, including ones in Maine, North Dakota, and Pennsylvania, have all sounded the alarm in recent days or weeks, warning of a surge in jobless claim fraud.
North Dakota authorities said criminals committing the fraud look to many different sources to obtain victims' personal information, including from buying social security numbers on the dark web.
"These sophisticated schemes are often hard to detect and ultimately can result in very large losses," they warned.
"While fraud is not new or unique, organized criminals across the nation are now targeting unemployment programs expanded during the pandemic in unprecedented ways," Commissioner of the Maine Department of Labor, Laura Fortman, said in the release.
The FTC said people often find out about the fraudulent claims made in their name when the receive a notification from their state unemployment office or their workplace that they allegedly applied for benefits.
When this happens, it means someone is almost certainly exploiting the victim's confidential personal information, including Social Security number, Gressin said.
Further, some people fall prey to what's known as a "money mule scam," which may expose them to legal liability. This is a scenario in which the fraudulently obtained unemployment benefits aren't sent to the perpetrator's account, but to the victim's. Criminals will then contact the victim to try and get them to transfer some or all of the money.
She warned that giving a scammer bank account information raises the risk that they may misuse it.
"You could even get into legal trouble for helping a scammer move stolen money," she warned.
People who suddenly receive benefit money that they never applied for should report the incident to the state unemployment agency, the FCT said.