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Fake unemployment claims, real checks hit Western Pa. mailboxes; what to do if a fraudster targets you

Beware of fake unemployment claims hitting your mailbox as fraudsters continue to target Pennsylvania’s labor coffers at alarming rates.

Scammers have been signing up unwitting — and still fully employed — residents for jobless benefits as part of a surge in sophisticated identity theft schemes to steal taxpayer money during the covid-19 pandemic.

Authorities at state and federal levels first flagged a significant uptick in such types of unemployment fraud last summer, as spikes in claims filings overwhelmed understaffed labor departments during the covid-spurred economic slowdown.

Between April 2020 and March of this year, Pennsylvania officials recaptured nearly $800 million by halting improper payments issued to fraudsters or preventing the fraudulent benefits from getting sent out, the state’s Treasury Department reported in mid-April.

“While many types of fraud have existed throughout the history of unemployment compensation, such as providing false wages, the recent increase in fraud attempts are tied to leaks of personal and confidential data, like Social Security numbers, from sources outside of state government,” said Pennsylvania labor department spokeswoman Sarah DeSantis. One such leak was the 2017 Equifax data breach that affected 150 million people.

Despite increased efforts to combat fake-claim fraudsters, the problem continues to plague strapped labor departments nationwide.

‘Nowhere near resolved’

“There’s a little bit of a misconception that the problem has been solved and it was just in 2020, and that is absolutely not the case,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center. “It’s nowhere near resolved.”

The center is a California-based nonprofit that provides free consumer advice on identity theft issues. Between Jan. 1 and June 30, the Identity Theft Resource Center received more requests to assist with unemployment insurance-­related identity theft than it did in all of 2020.

The Tribune-Review has learned of unsolicited and inaccurate benefits notifications going out this month and last month to residents of Western Pennsylvania, including multiple Trib employees, as recently as July 1. Some even received paper checks totaling several hundred dollars.

Matt Miller, the Trib’s chief revenue officer, was among those surprised to learn from his human resources representative that he’d been approved for unemployment benefits that he did not seek.

“I was pretty upset,” said Miller, who resides in Washington County and received the notification early last week. “It’s like one of those things that you hear about it so often you almost just wonder when is it going to be my turn. There’s like a data breach every other week. I don’t even know how many times my data has been part of one of those breaches.”

It is unclear just how many fraudulent claims have been filed and what the total monetary damage could be. State officials said they could not provide updated figures as of this week.

“Due to ongoing investigations, (the Labor and Industry Department) does not currently have an estimate of the amount of fraudulent claims,” DeSantis said. “L&I also does not provide detailed information about its anti-fraud measures to avoid tipping its hand to fraudsters.”

U.S. Labor officials pegged the monetary damage via unemployment benefits identity fraud at more than $60 billion as of December.

‘Not free money’

Most fraud victims are unaware that thieves have filed claims or collected benefits in their names illegally until they receive unexpected mail, such as a payment, or a state-issued 1099-G tax form citing benefits they didn’t get.

“Common signs that a fraudulent unemployment claim has been filed in an individual’s name include the individual receiving notification that a claim has been opened, as well as the individual’s employer receiving notice of the opened claim,” DeSantis said.

Those who receive benefits money they didn’t apply for should notify the state and return it immediately, per the guidelines on the state’s website. Recipients who try to keep money issued fraudulently likely will be forced to repay it, may have the amount received deducted from future state benefits and could face other penalties and even possible jail time.

“If it was unexpected and you didn’t apply, it’s not free money. It’s an error, and it’s most likely fraud,” Velasquez said. “You are just going to get yourself into a world of hurt for trying to cash that check.”

State officials say a majority of fraud cases have been linked to the federal program called Pandemic Unemployment Assistance, or PUA.

By April, the state treasury department reported having issued stop-payments on 28,000 fraudulent paper check payments “returned by honest citizens”; canceled more than 27,000 debit cards and reversed about 17,000 fraudulent benefit payments in the past year.

“We owe a debt of gratitude to the many honest people who returned PUA payments they never applied for,” state Treasurer Stacy Garrity said in a statement. “Many of the scammers tried to collect benefits by filing for them and then taking them right out of the mailbox. The honest people who return payments deserve the most credit for our success.”

The perpetrators span well-organized criminal groups based overseas that purchase huge swaths of stolen identifiers on the dark web and funnel the money to wire accounts, as well as locals that try to intercept fraudulent mail in person or apply on the behalf of prison inmates, including several rings busted by the state Attorney General’s Office earlier this year.

Natasha Lindstrom is a Tribune-Review staff writer. You can contact Natasha at 412-380-8514, [email protected] or via Twitter .

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Source: on 2021-07-07 21:07:30

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