Fraud penetrating all state unemployment systems; IDES in pursuit of fraudsters

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information provided by the Illinois Department of Employment Security

SPRINGFIELD, Ill. (July 24, 2020) – The Illinois Department of Employment Security (IDES) is investigating a widespread fraud scheme that is being conducted nationwide, impacting each state’s federal Pandemic Unemployment Assistance (PUA) programs, which were implemented as a result of the COVID-19 pandemic. PUA provides 100% federally funded unemployment benefits for hundreds of thousands of individuals who were not traditionally covered by a state’s regular unemployment insurance program, including self-employed and sole proprietors. Under this program, 39 weeks’ worth of benefits are available to PUA claimants whose claims can be backdated as earlier as February 2, 2020, with benefits ending December 26, 2020.

The Department is aggressively cracking down on this fraud network, and staffers responsible for handling unemployment fraud are working directly with individuals whose identities have possibly been stolen. IDES is also working with local and federal law enforcement authorities to investigate, pursue, and prosecute those who are defrauding the unemployment insurance system.

An individual who has not filed an unemployment claim but has received a debit card or an unemployment insurance (UI) finding letter in the mail has most likely been the target of fraud. An individual whose personal identifying information is being used by fraudsters to file an unemployment claim is likely the victim of a prior cyber hack or data breach, such as the Equifax breach.

Individuals should take the following steps if they have not filed an unemployment claim and have erroneously received an unemployment debit card or UI finding letter in the mail:

  1. Immediately call IDES at 800-814-0513, and when prompted:
    o Select the English or Spanish language option
    o Selection option 1 for claimants
    o Selection option 5 to report identity theft

  2. Do not activate the debit card that was mailed to you.
  3. Have your credit report checked for possible suspicious activity and post a fraud alert.
  4. Visit the Federal Trade Commission’s website to learn helpful tips on recognizing and reporting identity theft.

One of the largest vulnerabilities within PUA is the absence of an employer on the other side of the claim to contest the claim in the event it is fraudulent or should be protested. Under regular unemployment insurance guidelines, an employer has the ability to alert IDES if a claim has been filed in the name of an employee who is currently employed, and has the ability to protest a claim if they believe the employee does not fall into the category of having lost work through no fault of their own.

This fraud scheme is in no way connected to the PUA program access issue experienced in May. The limited data access issue of the PUA system found that one PUA claimant was able to inadvertently access personal identifying information of a limited number of claimants who had already filed an unemployment claim. A year’s worth of free credit monitoring was provided to any claimant whose information may have been inadvertently viewed by this one individual claimant.