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May 27, 2021 Personal Finance

Unemployment Scam Alert: 5 Ways to Protect Yourself

While the unemployment rate has fluctuated greatly in the last decade, you may still find yourself filing for unemployment. In the financial sector, when we see a dramatic change of any kind of financial need—we also see a dramatic rise in a scam that goes along with it.

During COVID-10, the unemployment rate was so high that unemployment scams became much more common. Over 18,000 Americans lost a collective $13.4 million to coronavirus-related fraud since the beginning of 2020, according to the Federal Trade Commission. Unemployment benefit scams make up a significant chunk of that loss.

Similar unemployment scams continue to be seen in Oklahoma and other states nationwide. Scammers are filing bogus unemployment claims to businesses of all sizes pretending to be former or current employees. It’s a good idea to be vigilant with your personal data, even if you aren’t expecting to seek unemployment benefits. Employers of all sizes should also be aware of the possibility of receiving unemployment-related scam mailings.

How’d It Happen During COVID?

While unemployment scams are not as prevalent now as they were then, we can learn a lot from what happened in 2020 to avoid them today. With massive and sudden job losses across the country, millions of recently unemployed people were overloading unemployment websites and phone lines, making it easier for scammers to slip through. The federal government also waived some of the usual unemployment benefits regulations in light of the crisis. These factors combined make oversight quite a struggle. Without time to investigate each claim, scammers have filled the void.

This scam hit consumers directly, meaning scammers called or emailed unemployed people impersonating a U.S. Department of Labor or other governmental agency and pretended to need their personal information. In another scam, the scammer takes someone’s personal information and files a claim with bogus employment information hoping the system does take the time to properly verify the claim.

At WeStreet Credit Union, we’ve received unemployment claims for people who were never employed with us.

“Several claims have come through our office, and three of them had never worked here.”

Jonna Brakebill, WeStreet Credit Union Human Resources Manager

“We have to then go through the due diligence to see if they worked here and where they worked. It’s additional stress on an overwhelmed system. We’ve seen enough fraudulent claims come through that this prompted us to send out a message to employees. We then learned, even more, had been impacted.”

Even closer to home, Leslie Runyan, WeStreet Credit Union Chief Human Resources Officer, received an unemployment benefits approval letter in the mail at home despite the fact that she had never applied and was still employed.

“The fact is I was approved for benefits, and nothing came here for us to respond to,” Runyan said.

What Can You Do To Protect Yourself?

Here’s some practical advice on what to do if you want to help stop personal fraud during times of unemployment:

  1. “Check your mail,” Runyan said. “Be looking for materials sent to you from the U.S. Department of Labor or Oklahoma’s state unemployment office. If you receive anything that makes you think fraud may be occurring, reach out to the concerned agency immediately to determine if anyone may be posing as you.”
  2. If you suspect or know you have been a victim of this scam, review your credit. Consider freezing your credit for a period to slow down someone using your personal information, Brakebill said.
  3. Remember that filing or qualifying for unemployment benefits is free, Runyan said. If someone is trying to make you pay to sign up or to receive benefits, that’s a sure sign it is a scam, she says.
  4. Know that no government official will ask for you to share personal information over the phone, unless a phone appointment was preplanned and scheduled for a specific time, Brakebill said.
  5. Verify any web addresses where you enter personal information. Each state will have its own website dedicated to filing and checking unemployment claims. Look for the lock icon next to the URL and for the letter “S” after ‘http:’ in the web address, Runyan said. An https:// web address means that the website is secured properly.

Hopefully, as the unemployment rate decreases, we will see fewer of these scams. You are now armed with some resources and tips to avoid these scams if you do happen upon one now or in the future. Always be vigilant, report suspicious activity, and don’t share your personal information.