Criminals stealing unemployment benefits as claims surge

Criminals are seizing on a surge in job losses to steal unemployment benefits from Americans nationwide. This complicates an alrey tough situation for millions of financially strapped Americans and overwhelmed state unemployment offices.

While re’s exact measure of how many fraudulent claims have been me, states from Washington to Maine say y’ve seen an increase and numerous federal ncies are working to fight it.

“About 10% of (unemployment insurance) payments are improper under best of times, and we are in worst of times,” Scott Dahl, inspector general for U.S. Labor Department, told House Subcommittee on Government Operations. Dahl estimated that at least $26 billion in benefits could be wasted, with bulk of that going to fraudsters.

This forces unemployed workers, alrey reeling from loss of a job, to fight for benefits y need and are entitled to.

“We are deeply concerned about well-being of se people and when y will get this resolved and get money y need to live on,” said Eva Velasquez, president and CEO of nprofit Identity ft 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, federal government said 21.5 million people are receiving jobless aid. That creates ded opportunity for criminals. An extra $600 a week in benefits makes it more lucrative.

ditionally, state unemployment ncies have been overwhelmed by claims and are working to get payments to those in need as fast as possible. In some cases, security experts say new processes, ded worklo and outdated systems may have me it easier for criminals to act.

“This is El Doro for m and it’s pure hell for victims,” said am Levin, founder of data security firm CyberScout.

Security experts say bulk of fraud appears to be committed by criminals using stolen data to make claims using someone else's identity. information has often been gleaned from prior data breaches or direct attacks on state systems.

In many cases, victims don’t kw y have been affected until y apply for benefits and find out someone has beat m to punch. Some even find ir benefit payments halted when a criminal usurps ir benefits.

Victims should report a suspected fraud to state, ir employer and file a police report. But resolving issue and getting proper payment means going through state ncy that processes unemployment benefit claims, which is potentially alrey overwhelmed.

U.S. Secret Service issued a memo last month that suggested a well-organized Nigerian fraud ring was targeting state unemployment systems, according to New York Times, which got a copy of document. But nts were still working to pinpoint who was involved and from where. memo said that Washington was hardest-hit state but re was evidence of attacks in rth Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida. California cybersecurity firm Agari estimated last week that at least 11 states have been targeted.

On Thursday, officials in Washington said state has recovered $333 million out an estimated $550 million to $650 million paid out fraudulently.

Those with jobs are also targets of fraudsters. Blake Victor Kent said that last week he got a letter from Massachusetts Department of Unemployment Assistance informing him that y h commenced payments for his unemployment claim.

“That’s funny, because I am still employed,” he said.

Kent thought his information may have been exposed when he was a victim of a data breach a few years back. But his employer, Massachusetts General Hospital, sent an email a few days later to staff saying y were aware of a number of such cases for employees.

In or cases, criminals are targeting people with false job offers, assistance filing unemployment and to glean personal information. Or people may also be targeted and used as “mules” to move money for criminals.

Experts warn that if a criminal has eugh information to make an unemployment claim, y have eugh information to commit or acts of identity ft. So people need to protect mselves from furr harm by freezing ir credit and monitoring ir credit regularly for any irregularities.

People should practice good cyber hygiene as well, suggests John Breyault, who mans National Consumers League’s Fraud Center. That means changing passwords regularly, using two-factor auntication whenever possible to log into accounts and being wary of offers that seem too good to be true, wher that is by phone, online, mail or in person.

“Until this unemployment problem starts to recede, this is going to be a problem that sticks with us,” Breyault said.