Many people around the U.S. are relying on unemployment insurance assistance as the country battles the pandemic and associated economic effects. As unemployment has risen, fraudsters have been targeting consumers to steal unemployment insurance benefits. They do this by taking personally identifiable information (PII) that cybercriminals have posted on the dark web, stolen from unsuspecting consumers or gained from past data breaches.
Once fraudsters have this information, which can include a victim’s name, address, Social Security number and driver license number, they falsely apply to a state’s unemployment insurance program to register for unemployment insurance benefits. These benefits are typically distributed via direct deposit or prepaid debit cards for those without bank accounts. Once a fraudster has access to the stolen funds, they can use a prepaid payment account service and its mobile app to cash out or make purchases — in-store or online — for items like gift cards, electronics, cryptocurrency, money orders, and money transfers.
“We’ve seen a significant increase in fraudulent purchases in July, related to unemployment insurance fraud schemes,” said Michael Lemberger, senior vice president and regional risk officer for North America at Visa. “Fraudsters are actively targeting state unemployment insurance programs hoping to find gaps. This problem requires a collective effort with everyone doing their part, including the state workforce agencies, law enforcement, financial institutions, payment processors and payment networks. Consumers must be on-guard for suspicious activities so fraudsters cannot exploit their identity for financial gain.”
The warning signs for these crimes can be tough to spot, but here are common red flags to look out for:
1) Offers from people or organizations you don’t recognize promising early and faster unemployment insurance benefit payments.
2) Solicitations from people you don’t know offering money in exchange for your personal information.
3) Letters or email correspondence indicating new accounts or unemployment insurance benefits have been initiated in your name.
To avoid your personal information from being used for fraud, Visa recommends the following to protect yourself:
- Proactively register for an unemployment insurance account directly through your state’s website. This way, if anyone tries to steal your information, state authorities will notify you as soon as possible and prevent your money from getting stolen.
- Secure your personal information — online and offline. Use online tools to encrypt and lock down sensitive digital information, such as your financial and health documents. For physical documents with your personal and financial information, make sure they’re locked in a secure spot and safely shred any documents you don’t need.
- Be mindful of social media and email scams. If it seems too good to be true, it probably is. Fraudsters will try to convince you that you can get your benefits sooner, you may be eligible for more benefits, or a person you don’t know needs help with their unemployment insurance payments.
- Just like our physical hygiene is crucial right now, so is our cyber hygiene. Don’t click on links or attachments from email addresses and people you don’t recognize or offers you didn’t ask for.
- And, last but not least, your information is valuable so keep your personal information to yourself. Never share your personal information unless there is a legitimate reason to do so.
If the worst-case scenario happens and a fraudster gets hold of your personally identifiable information to commit unemployment insurance fraud, there are steps Visa recommends you take, including:
- Contact the three primary credit bureaus, Equifax, Experian and TransUnion.
- Contact your respective financial institution.
- Contact your state unemployment office.
- Visit IdentityTheft.gov to report the fraud to the FTC and get help with important next steps for recovery.
- Review your credit reports often.
Cybercriminals are continuing to up their game, but if people take the necessary precautions and remain on the lookout for anything suspicious, these fraud attempts will become much less successful and frequent.