Employers across the country are receiving claims for individuals who are still employed and did not file a UI claim. These are known as impostor claims and unfortunately, it is not uncommon to see an increase in such activity following a tragedy (fire, hurricane) or downturn in the economy (Great Recession). These fraud rings take advantage of the surge in unemployment activity following such events. Essentially, they file mass numbers of claims hoping some will stick. The state agencies are aware of the situation, but you should expect some delays in their resolution, due to the current volume they are experiencing.
(Additional reading: 9 things to do if your unemployment gets stolen)
What is an Impostor Claim?
An impostor claim is a form of identity theft and is often the product of organized fraud ring activity. For example, Jane Doe works for ABC Nonprofit. Her personally identifiable information (PII), such as name and social security number, is used by “organized crime fraudsters” to file an unemployment claim and collect benefits against ABC Nonprofit. However, Jane Doe still works for ABC Nonprofit and didn’t file the claim. Jane Doe had no control over the claim being filed; someone else did it using her Personal Identifiable Information. She is the victim of identity theft.
What’s the Difference between a Fraud Claim vs. Impostor Claim?
A fraud claim is different from an impostor claim. A fraud claim would be if a claimant files his/her own claim, but fails to properly report earnings for a week in which they also collected benefits. For example, they earned $500 but he/she reports $0 earnings to the unemployment (UI) agency to receive an increased benefit amount. In this example, the claimant had control over his/her own actions whereas in the case of an impostor claim, the victim had no control over that activity.
What tools do state unemployment agencies have to help?
State UI agencies do have safety nets in place. They help to identify many of these impostor claims prior to being issued, thus protecting the integrity of the UI system at large. Additionally, some of those efforts include detection of potentially fraudulent IP addresses, suspicious bank accounts, debit card requests, employer addresses, claimant addresses, and more. However, to ensure its efficacy, these detection tools are proprietary and confidential.
How can I help if my employee is a victim of an Impostor Claim?
Below is a good starting point of four helpful actions to share with your employees to assist them with this issue. Please note, these resources are for the impacted worker and not the employer. Thus, only the effected employee will know the answers to the questions purposed from these tools. For security purposes the employer will not, and should not, know such information.
Employee Impostor Claim Tool Kit:
- Provide the website www.identitytheft.gov, which is administered by the Federal Trade Commission, to your employee.
- Document the incident. Include all relevant state unemployment insurance claim data.
- Encourage the victim to file an identity theft report with his/her local police department and advise them of the option to file Form 14039 with the IRS: https://www.irs.gov/pub/irs-pdf/f14039.pdf
- And finally, look to freeze the affected employee’s credit. Most credit agencies will allow the freezing of credit if there is a case of identity theft.
What should an employer do if unemployment benefits were paid?
Employers should always protest and appeal the benefit charges of an impostor claim. Employers should also request and seek credit for the improper charges. Please note, 501(c) Agencies Trust members can obtain assistance with the items above.
An employer must also inform the affected employee that:
- Payments of unemployment benefits went out
- The state treasury may be notified of benefits for state income tax purposes
- The IRS may be notified of benefits for federal income tax purposes
- The employee should follow the steps listed in the above Employee Tool Kit (file police reports, lock credit reports)
The above information was provided to us by our friends at EWS.