Unemployment assistance fraud scam questions
July 18, 2021 9:20 AM   Subscribe

Fake unemployment claims have been filed under my name in two states. I'm confused as to how this scam works for the scammer -- I assume they used my social security number, but why did they use my actual address? It was the letters from the 2 Departments of Labor to my home address with my claimant info that alerted me to the fraud, and today I even received a Visa debit card from the NJ Dept of Labor & Bank of America.

I know that for some people who had fake claims made using their info earlier on in the pandemic, they didn't find out about it until after 2020 tax time, because the payouts went to the scammer without them ever being aware of it until it affected their taxation. But I don't understand how the scam works if the scammer is using my actual address and employer. (The PA claimant notice says it's for 36K self-employment, and the NJ notice doesn't say, but when I told a co-worker about the fraud she said that someone filed a claim in NY State using her info, and NY did eventually call our employer about the claim.)

I've already called the fraud lines for NJ & Pennsylvania, and gave a heads-up to my work HR. There hasn't been any other suspicious activity with my banking/credit cards so far (though I admit I haven't done all the 'what to do when you've been identity-thefted' to-do's yet, I've been having some procrastination problems on that, so, general advice on that to get me over the procrastination block would be appreciated), and given my co-worker's experience (she also just reported the fraud to NY State and let them handle it) I'm not too worried that this is the start of an identity theft scam targeting me or my accounts personally. But I'm still baffled by how the money would get to the scammer in this scam.
posted by oh yeah! to Work & Money (4 answers total) 2 users marked this as a favorite
why did they use my actual address? .. I'm still baffled by how the money would get to the scammer in this scam.

I think that you are right in your assumption that in that most cases these scammers, particularly early in the pandemic when states were overwhelmed, used an address that they controlled when they filed false claims for unemployment. This is probably harder to do now that the states are treating claims as suspicious if they are filed with addresses other than ones known to be associated with the claimant.

In this case, most likely they don't intend to use the physical card delivered to your address. The debit card you receive in the mail draws on funds in a bank account set up specifically for the unemployment claim. By the time you received the physical card in the mail it is possible that the scammer has already enabled online access to the account associated with the card and requested a transfer of the the funds to another account controlled by the scammer. Depending on the fraud controls (or lack thereof) of the various state unemployment insurance programs they might need some information like a code that would normally have been mailed to you to activate the online account — but some state UI programs may not have required this or have a mechanism to request communications that would normally have been done by mail to instead be sent electronically (which would have been to an e-mail controlled by the scammer).
posted by RichardP at 10:06 AM on July 18

Response by poster: I did consider following the instructions on the NJ form about going to the 'myunemployment . nj . gov' site and setting my PIN to be able to see the status of the claim, but I didn't want to risk exposing/linking my actual email address to the scammer's, and figured it would be safer to just report the fraud and leave it up to the state to block or retrieve the money. For the PA claim, I was able to speak to an actual person on the fraud line, but for NJ it just went to an automated message asking me to leave my name/phone #/claimant #/etc and that someone would call me back (they haven't yet).
posted by oh yeah! at 12:06 PM on July 18

Individual states were overwhelmed by the COVID wave of unemployment last year and have barely recovered now. And I heavily suspect scammers have someone either in the unemployment departments or in BofA's pipeline to intercept and exfiltrate card numbers.

I was unemployed for about 15 months and got EDD (California) for under a year's worth of unemployment. The EDD debit card number were leaked despite having NEVER been used in a store or online. (I transfer funds into my personal account) One day, there was suddenly a DoorDash charge on it. Over 50 bucks worth of food. I called the fraud line and they gave me another card and refunded that amount. AFAIK, the only people who'd know this debit card's number besides me would be BofA and EDD, no one else. So the leaks came from there.

And let's just say BofA has had enough that they want OUT from the unemployment benefits business in California. Apparently it's costing them money insteading making any money.
posted by kschang at 1:39 PM on July 18

General advice on what to do when you've been identity-thefted:

The simplest thing is to go set a one-year fraud alert on your credit report through Experian. They'll alert the other two agencies, so you only have to do this once. I had to do this recently and Experian's website was the slickest of the three, only takes a few minutes. It then takes just a couple more clicks to view your Experian credit report to make sure nothing else weird is going on, and to set or lift a credit freeze.

If you want to set a credit freeze (as opposed to one-year fraud alert) on TransUnion and Equifax as well you have to go through their sites separately. Those are older sites and take more like 10 minutes instead of 5 but none of them are too bad; I decided it was worth the hassle.

Separately, as far as keeping an eye out for theft of your actual accounts instead of opening new accounts, it's always good advice to read your credit card transactions and bank account transactions once a month, and log into any other financial accounts you have to make sure nothing looks weird. You're in a much better position if you catch fraudulent charges within a month instead of later, because once they let you know about something on a statement it's more likely to be on you to pay for it. If you make a folder of bookmarks for each site, and set a monthly reminder for like the first Saturday morning of the month to "open all in tabs" and read over each site, it only takes 10 minutes or so.
posted by john hadron collider at 2:22 PM on July 18 [2 favorites]

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