Employers Beware: Fraudulent Unemployment Claims on the Rise

Amid a spike in unemployment claims in Florida and nationwide, employers are advised to watch for and report fraudulent claims against their businesses.

According to the U.S. Department of Labor (DOL), unemployment claims in Florida have hit their highest levels since the summer of 2020 and have stayed there for two weeks. The Florida Department of Economic Opportunity (DEO) has expressed concern that the sudden increase is due to fraud. While the state’s mobile app has implemented fraud-detection software, the actual cause is still under investigation.

It’s a trend that impacted states across the country. California has likely paid over $11 billion in fraudulent claims. In Colorado, 75% of unemployment applications were deemed fraudulent in just one month.

How could this happen?

Historically, unemployment fraud has been attributed to applicants getting benefits while still working. These days, however, cybercriminals are more frequently utilizing identity theft techniques for this purpose. They file fraudulent unemployment claims using other people’s names and social security numbers; payment is then sent to their own address or bank account.

It’s a task made easier with the pandemic and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. With more money injected into the system and loosened restrictions for claims, oversight has dropped. And since unemployment benefits generally don’t hit credit reports, an unsuspecting individual wouldn’t be notified.

What can I do?

Employers in Florida should regularly log in to the DEO’s employer website to check on unemployment claims made against them. If you see any claims for non-employees or current employees, report them to the state immediately.

If you receive a Notice of Reemployment Assistance Claim (UCB-412) and believe the claim is a case of identity theft, you must clearly indicate as such in your response. Not only will this trigger an investigation, it will also lock the claimant’s account and non-charge any benefits that might have been assessed to your employer account. With mail running slowly, however, UCB-412 forms could be several weeks behind. So proactive monitoring of your employer account is key.

You should also notify any current employee immediately if you receive a notice of claim and you suspect fraud. They can then take precautions against identity theft and check their records. Employees should also contact the Florida DEO and report it.

Finally, contact your HR consultant if you’re unsure how to proceed. Whether an unemployment claim is real or fraudulent, you should always respond promptly to them.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.