Unemployment Fraud Scam - What You Need To Know

Employers in New York and nationwide have seen an increase in fraudulent claims for unemployment benefits. 

It appears that cyber-criminals in possession of stolen personal information from earlier national data breaches have been attempting to file large amounts of illegitimate unemployment claims.  Those claims have drawn the attention of employers because they have been often filed on behalf of employees who have never been discharged or laid off, high level executives, and even retirees.

We recommend that employers report any suspected fraudulent claims to their state unemployment office.  In New York, information on filing fraudulent claims reports can be found at https://www.labor.ny.gov/agencyinfo/uifraud.shtm.

Employers should also separately protest any fraudulent claims with their state’s unemployment office.  The notice of protest should include: the fact that the individual did not file the claim; the current employment status of the individual (currently employed, retired, etc.); and that the employer has reported the fraudulent claim.

Employees who have been affected by unemployment fraud likely have suffered a breach of their personal information.  Those individuals should consider taking steps to help reduce the risk of identity theft.  Those actions may include:

  • Monitoring bank accounts and credit card bills for unauthorized activity.
  • Obtaining, reviewing, and correcting any credits reports.
  • Placing a fraud alert or security freeze on consumer reports.

This is an alarming trend as cyber-criminals continue to exploit unemployment systems that are already overwhelmed.  Please contact any member of the firm’s Labor and Employment practice for more information on addressing fraudulent unemployment claims.

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