Share on facebook
Share on twitter
Share on linkedin
Share on pinterest

Unemployment Benefit Fraud Rose in 2020. Now What?

The U.S. has lost more than $36 billion by making improper unemployment benefit payments since the CARES Act passed in the spring, and fraud is largely to blame. 

Enacted to try to rush aid to Americans who were struggling financially as the pandemic wreaked havoc on the economy, the CARES Act provided pandemic unemployment assistance to gig workers and independent contractors who lost wages or jobs. To further speed up payments, some states eased the burden of proof on these workers. 

Investigations into unemployment benefits make up about 70 percent of Inspector General for the Department of Labor’s caseload — about six times what it was prior to the pandemic. 

But the more lax approach, however well-intentioned, opened the door for scammers. Bad actors engaged in various forms of fraud to profit off the pandemic and CARES Act. Identity theft was a common way. The criminals stole personal data from someone, assumed their name and filed a claim. Others contacted fraud victims and asked them to verify their identity to gain access to a prize or get a new job, neither of which existed.  

What’s Being Done?

Congress passed a new $900 billion relief package in December, but some states began taking action to prevent fraud even before that. For example, New Mexico implemented a five-day waiting period before issuing unemployment money to verify that an applicant’s bank account wasn’t connected to a known criminal enterprise. 

The new relief package also includes fraud-fighting measures. People currently on unemployment must submit documentation, such as tax forms or pay stubs, to verify employment within 90 days. After Jan. 31, applicants will have 30 days to submit this paperwork. States are also required to put identification procedures in plays, and applicants will have to certify their COVID-related reason for needing unemployment assistance each week.

Though this will slow down aid, it will ensure the right people are getting it.

More Help May Be Coming

Seniors are always prime targets for scammers, and COVID-related fraud hasn’t been any different. But some elected officials want to crack down on this and protect seniors. Rep. Josh Harder (CA-10) recently introduced the Protecting Seniors from Scam Act

If passed, the bill would require the Internal Revenue Service (IRS) and the Federal Trade Commission (FTC) to report to Congress on how many and what types of scams have targeted seniors. The bill specifically calls out stimulus payment fraud, whereby criminals try to steal these funds from seniors. Under the bill, these agencies would also issue policy recommendations to Congress on how to handle and mitigate these scams. It calls for the FTC and IRS to better inform the public of the scams using their websites and the media.

What You Can Do

You can protect yourself from scams by not giving out personal information to people you do not know. Government agencies, such as the IRS, will never ask for personal data, such as your social security number. You also don’t have to pay to gain access to unemployment insurance or stimulus checks. If someone tries to convince you otherwise, do not continue to engage with them.

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest


Your email address will not be published. Required fields are marked *

Our Recommendations

physical therapy vs. occupational therapy
Physical Therapy vs. Occupational Therapy
how to maintain a good blood oxygen level
How to Increase Your Blood Oxygen Levels
britney spears conservatorship free act
Lawmakers Put Forth A Bipartisan “Free Britney” Bill to Tackle Conservatorships
Eye Conditions Associated With Aging
4 Eye Conditions Associated With Aging and How To Treat Them Successfully
what to do when someone dies
What To Do When Someone Dies – A Step by Step Guide
Word to the Wise by WayWiser is a trusted space with information on the latest scams, topics, and issues impacting older adults
WayWiser © 2020. All Rights Reserved.
Become Part of The Community
Create an account

Join Our Community

Protect Whats Most Important Today