How to Respond to CT Unemployment Fraud
Generally speaking, unemployment claims are considered to be a hassle by employers everywhere. The headache of dealing with appeals, drawn-out hearings, and government paperwork can have even the toughest of HR professionals hiding under their desks. Which is why we regret to inform you that there is something else related to unemployment that you need to be aware of the next time you receive a claim: fraud. Unemployment fraud has become extremely common in the past few years, and it’s something that you need to ensure you and your HR team are on the lookout for.
Why are fraudulent unemployment claims on the rise?
Fraudulent unemployment claims have been on the rise since the beginning of the COVID-19 pandemic, and many employers across Connecticut and the rest of the US are noticing another recent surge. ID WatchDog, a subsidiary of Equifax is dedicated to helping educate individuals and businesses to prevent identity theft, says that the increase in funding for unemployment programs and decrease in requirements to qualify since the pandemic have made filing fraudulent claims easier and more desirable for scammers. All they need is some personal information from individuals who are currently employed, which they can get through purchases on the dark web, hacking into employer databases, or from folks themselves through phishing emails/texts/phone calls. Connecticut residents may remember the text message scam that went around last year, where individuals received a text message supposedly from the Department of Labor asking them to verify their personal information.
How do you detect a fraudulent claim?
The state will usually send notice to employers when an employee/former employee of theirs tries to claim unemployment benefits. The easiest way for an employer to catch unemployment fraud at this stage is to very carefully review each claim that comes in. Scammers will most often try to claim unemployment benefits using the name of someone who is currently employed with your organization. If a claim like this comes through, it is a red flag that something is not right.
If the claim you receive is in the name of a former employee, you may automatically assume that you’re in the clear. However, you should still contact the ex-employee in question if possible to confirm that it was indeed them who filed the claim. This is especially important if it is not someone who left recently, as scammers are known to try and file claims in the names of individuals who were employed with you a long time ago as well.
What are your responsibilities as an employer if you suspect a claim is fraudulent?
Employers who suspect unemployment fraud should contact the Connecticut Department of Labor’s division using one of the phone numbers on their website under “Contact Information” as soon as possible and explain the situation to them. They will likely be advised to write “Fraud” in large and visible letters on each form they received with the claim and return the forms by fax or email.
It may also be advisable to review how you store employee personal information and ensure that it is well-protected, especially if it is digitally stored. Small businesses are common targets of cyber attacks, much more so than larger organizations, in fact. If you have an IT department, you may want to let them know about the fraudulent claim so that they can look out for data breaches that could compromise your employees’ confidential information.
How should you advise employees who have been the victim of a fraudulent claim?
Your employee may not be aware that a false claim has been filed in their name. You should alert them as soon as possible. They likely received a notice of their claim via mail as well but it's recommended you take the extra step and alert them that you believe you received a fraudulent claim in their name. It is highly likely that if the personal information needed to file an unemployment claim is in the hands of bad actors, their bank accounts, credit cards, and other information could be at risk. The faster the employee is made aware, the more likely it is that they’ll be able to do something about identity theft.
The Connecticut Department of Labor encourages employers to have their employees fill out an identity theft report on their website, at filectui.com under “Fraud Watch.” You should also let employees know that they are able to file a police report if they wish, and they should check their other accounts for abnormalities and potentially change passwords or PIN numbers.
As the saying goes though, an ounce of prevention is worth a pound of cure. Alert your employees to the rise in fraudulent claims and let them know they should be extra diligent with their personal information, be appropriately suspicious about contacts they may receive from anyone claiming to represent the Department of Labor, and report any questionable work emails they receive to you or your IT department. You may even want to invest in training that will help your employees detect phishing emails and other types of common scams that they may encounter at work. Criminals are no longer posing as Nigerian princes to try and con people out of money and personal info. Today’s scams are much more believable and significantly harder to identify, and it may be worth it to empower your employees (and yourself!) with the knowledge and skills they need to do so. Your employees will appreciate you looking out for them, and you may save yourself and your business from avoidable trouble.
Unemployment fraud may be rampant, but by maintaining proper vigilance and taking action quickly when you come across a potentially false claim, you can help you and your employees to curb the success of would-be fraudsters. Make sure that anyone at your organization who may be reviewing unemployment claims is properly informed and trained on how to spot a potentially fraudulent claim and what to do if they see one. Ensure you take proper cybersecurity measures to help protect your employees’ personal information and advise your team to be protective of their personal information. Taking these measures will ensure that you stay one step ahead of unemployment scammers.
