Covid-19 Fraudsters Keep Targeting Jobless Claims. What Does It Mean for Workers and the Data?
By Sarah Chaney Cambon
Waves of attempted fraud during the pandemic have plagued state
unemployment benefits programs. We answer questions on what
unemployment fraud is, how it is affecting the national jobless
claims report and what states are doing to combat it.
What is unemployment fraud?
There are different types of unemployment insurance fraud,
including when someone knowingly continues to collect unemployment
benefits after returning to work.
During the pandemic, states have grappled with a rise in
unemployment insurance fraud tied to identity theft. In this form
of fraud, criminals steal victims' identities and then apply for
Victims of identity theft often discover they have been targeted
when they try to file for jobless benefits, receive notification
from the state unemployment office, receive an Internal Revenue
Service form noting the payments or get a notification from their
employer, a Federal Bureau of Investigation notice said.
Is unemployment fraud distorting the weekly jobless claims
Unemployment fraud doesn't appear to be distorting the long-term
trend in jobless claims. Filings climbed last spring when the
pandemic first hit and fell over the summer during business
reopenings. They stagnated over much of the winter and improved in
However, fraud does at times throw off the weekly movements in
unemployment claims. A Government Accountability Office report
released late last year said the weekly data both over- and
underestimated the actual claims counts at various times. That is
because states might report the fraudulent claims one week and then
correct them the next.
For instance, claims fell significantly in Ohio last week after
a large increase earlier in the month that state officials said was
likely attempted fraud.
How widespread is the fraud?
States across the country -- including California, Louisiana,
Illinois, Maryland and others -- have collectively received
millions of unemployment insurance requests that officials believe
to be tied to fraud, with losses likely in the billions of
How is the fraud affecting workers?
Some states have frozen the accounts of legitimate filers as
they address the fraud. Many workers say they have faced financial
stress during payment delays.
Tax season is creating new headaches. Some workers are receiving
1099 tax forms saying they claimed unemployment benefits when they
How are states addressing the fraud?
State unemployment insurance programs have received funds from
the federal government. They have used this money to hire staff to
investigate potential fraudulent claims and to implement software
to help weed out fraud, a U.S. Labor Department report said.
The U.S. Labor Department announced in February the award of $49
million in grants to assist some states as they combat fraud.
Write to Sarah Chaney Cambon at email@example.com
(END) Dow Jones Newswires
February 25, 2021 15:29 ET (20:29 GMT)
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