Handling Unemployment Fraud During COVID-19

Handling Unemployment Fraud

What is Unemployment Fraud?

Unemployment fraud is using false information in order to claim undue unemployment benefits. This usually involves stealing someone’s personal information such as name, social security number, birthday, and/or address using the dark web. They then file for unemployment under the victim’s name and/or employer and direct the benefit money to a drop account. Victims are often those who do not have an employer or couldn’t be notified that their information is being used fraudulently such as newborns, the recently deceased, or those who are incarcerated, but even those with an employer can be a victim of unemployment fraud. 

Unemployment fraud is often not detected by government officials because it can be quite difficult to tell a fraud from a legitimate claim. This is especially true recently as unemployment is at an all-time high. Government employees in charge of investigating these claims are required to respond within a reasonable amount of time and with their caseloads being overwhelmed, this doesn’t leave enough time to properly investigate each claim and verify the previous employer. This can be even more true in states without income tax requirements as tax records cannot be used to verify the identity of the person making the claim. 

Additionally, employers have seen unprecedented numbers of security breaches in recent years which have put thousands upon thousands of people’s personal information within reach of criminals browsing the dark web for fraudulent identity information. 

Negative Repercussions 

The fallout of such a high volume of employment fraud is both long and short term. The short-term effects are primarily for the victim whose information was stolen by the fraudster. They may be required to pay taxes on the government aid that they have not actually been receiving which can be especially painful for them if they didn’t know that the fraud occurred until they receive notice that they owe the government money. The process is also often long and difficult to prove that the claim was a fraud and not legitimate. They have to let their employer know, contact the IRS and credit bureaus and file police reports, all of which require a substantial amount of paperwork. The wait time in having their case handled by any of the aforementioned agencies can be quite long and it’s possible that they may never see resolution, depending on how good the fraudster was at avoiding being tracked. 

Newborns and those who are incarcerated will have an even tougher time getting retribution as they aren’t able to fight back until the fraud has long been committed and they don’t have an employer that would take notice of the claim.

Preventing Unemployment Fraud

Verifying identity, both in-person and online, is an essential process for unemployment office employers to implement. Luckily, IDScan.net has both types of solutions. 

For In-person identity verification, we have full authentication solutions that will integrate with your current system to capture data from the applicant’s ID and verify that the information is correct. We offer multiple layers of authentication – including:

  • Front-back match – this ensures the barcode information matches the written information on the front of the ID 
  • Security features – our solution checks IDs under UV, Infrared, and white light to detect security features present on the document  
  • External checks can be added for a more comprehensive layer of identity verification

As for online solutions, our mobile ID validation will help employers ensure the ID is valid and that the applicant is who they claim to be. The process is simple, effective, and requires little intervention from employers. The applicant takes 3 images with their smartphone:  

1. Front of the ID 

2. Back of the ID and 

3. A selfie  

The automation performs identity verification by checking that the ID is formatted correctly. It also checks that the information in the barcode matches what is displayed on the front of the ID. It then queries the USPS database to confirm that the address on the ID exists. Lastly, it moves to the pictures, calculating a confidence percentage in the facial match between the photo on the ID and the selfie supplied by the applicant. The selfie is also run through anti-spoofing processes to assure it is legitimate. 

FAQ

What is unemployment fraud?

Unemployment fraud is using false information in order to claim undue unemployment benefits.

Who is negatively impacted by unemployment fraud?

Individuals who have unknowingly had their identity used for unemployment fraud, as well as state governments, are significantly negatively impacted.

How can unemployment fraud be prevented?

Identity verification can safeguard against unemployment fraud – IDScan.net offers both in-person and online.