Scammers steal unemployment benefits
Officials recover $333M in fraudulent payments
Criminals are seizing on a surge in job losses to steal unemployment benefits from Americans nationwide. This complicates an already tough situation for millions of financially strapped Americans and overwhelmed state unemployment offices.
“About 10% of (unemployment insurance) payments are improper under the best of times, and we are in the worst of times,” Scott Dahl, the inspector general for the U.S. Labor Department, told the House Subcommittee on Government Operations. Dahl estimated that at least $26 billion in benefits could be wasted, with the bulk of that going to fraudsters.
This forces unemployed workers to fight for the benefits they need and are entitled to.
“We are deeply concerned about the well-being of these people and when they will get this resolved and get the money they need to live on,” said Eva Velasquez, president and CEO of the nonprofit Identity Theft Resource Center, which has seen a sharp jump in calls for help with unemployment fraud.
Since mid-March, 42.7 million people have applied for unemployment benefits, though some have been rehired as states allow businesses to reopen. On Thursday, the federal government said 21.5 million people are receiving jobless aid.
Additionally, state unemployment agencies have been overwhelmed by claims and are working to get payments to those in need as fast as possible.
“This is El Dorado for them and it’s pure hell for victims,” said Adam Levin, founder of data security firm
CyberScout.
Security experts say the bulk of the fraud appears to be committed by criminals using stolen data to make claims using someone else’s identity.
The U.S. Secret Service issued a memo last month that suggested a well-organized Nigerian fraud ring was targeting state unemployment systems, according to The New York Times. The memo said that Washington was the hardest-hit state but there was evidence of attacks in North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida. The California cybersecurity firm Agari estimated last week that at least 11 states have been targeted.
On Thursday, officials in Washington said the state has recovered $333 million out of an estimated $550 million to $650 million paid out fraudulently.