Guest Writer: Eva Velasquez

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Identity theft is not one single type of crime. In fact, there are several different varieties of identity theft, such as medical, financial, criminal and government identity theft— all with different goals for the thief and different methods of recovery for the victim. But one form of fraud that’s on the rise not only encompasses identity theft, it actually extends to several different kinds at once: unemployment insurance fraud.

Before looking at how identity theft is involved, it’s important to understand what unemployment insurance fraud is. In this type of fraud, someone files for unemployment insurance but isn’t entitled to the benefit. It could be an individual who is still working, is working ”under the table” for cash, is working at a temporary or part-time job or other similar instance. This type of fraud costs the taxpayers an estimated $3.3 billion each year, and carries serious criminal and legal consequences.

But what if the consumer is not the one committing the fraud? What if an identity thief has gained access to someone’s personally identifiable information, then uses it to break the law so that they’re culpable and he gets away with it?

This is where unemployment identity fraud covers a multitude of identity theft issues. On the one hand, this could be considered criminal identity theft since the victim is the one whose name is on a fraudulent check and therefore (for all intent and purposes) has broken the law. At the same time, this could fall under employment fraud, since the victim’s Social Security number has been associated with a work history, whether true or concocted. Of course, applying for the unemployment benefits also makes this crime a form of government identity theft.

It would be great if the thief wasn’t smart enough to create an entirely false persona before applying. There have been multiple reports of employees being called into their boss’ offices and asked why they applied for unemployment benefits. If that’s the case, consider yourself lucky to have found out that this even happened.

Unfortunately, if the thief creates an entire paper trail of false documentation with a made up work history, the victim may not be contacted until a law enforcement agent is sent to uncover why the true individual is working (and taxes are being reported) while also drawing unemployment benefits. The victim will have some work to do in order to prove they are not associated with the fraud.

However the fraud occurs, here are some steps ITRC suggests you must take immediately if you’re the victim of unemployment identity fraud:

  1. Order copies of credit reports from the three reporting agencies. If a thief had enough information on you to file for benefits, he might easily be able to do other damage.
  2. File a police report. You’ll need to make sure your name is cleared from this crime, and you’ll need that documentation for step three.
  3. File a form 14039 with the IRS, just to alert them to the possibility of tax refund fraud later on.
  4. Contact the Social Security Administration to report the problem, and to make sure that no one is using your SSN for employment, which will cause problems come tax time.

Unemployment fraud is costly, and it’s tempting to think it’s the government’s problem, not the consumer’s problem. But the same process that lets citizens take advantage of legitimate unemployment benefits when they are actually needed is what lets a criminal apply under a victim’s name. Hopefully, the issue is big enough that consumers are aware of the potential for even further damage.

LexisNexis proudly sponsors and provides financial support to the ITRC. For more information on the ITRC’s financial support relationships please visit their website.

About the ITRC

The Identity Theft Resource Center (ITRC) is a nationally recognized non-profit organization which provides victim assistance and consumer education through its toll-free call center, website and highly visible social media efforts.

It is the mission of the ITRC to: provide best-in-class victim assistance at no charge to consumers throughout the United States; educate consumers, corporations, government agencies, and other organizations on best practices for fraud and identity theft detection, reduction and mitigation; and, serve as a relevant national resource on consumer issues related to cybersecurity, data breaches, social media, fraud, scams, and other issues

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Eva Casey Velasquez
Eva Casey Velasquez is the President/CEO at the Identity Theft Resource Center, a non-profit organization which serves victims of identity theft. Ms. Velasquez previously served as the Vice President of Operations for the San Diego Better Business Bureau and spent 21 years at the San Diego District Attorney’s Office. The last 11 of those years were spent conducting economic crimes investigations, with a focus on consumer protection cases such as false advertising and unfair business practices.