Be Aware: A New Unemployment Fraud Scheme is Sweeping the Nation

We want to share an overview of a fast-growing cyber fraud scheme happening across the United States and offer suggestions to help protect your business and your employees.

As you are aware, state unemployment agencies face unprecedented workloads as a result of the COVID-19 pandemic. The volume of claims, the urgency to provide financial relief, and technology advances have created a large-scale opportunity for hackers to file fraudulent claims.

In many cases, hackers are filing unemployment claims for currently employed workers, and directing payments to accounts which are being swept once funds are deposited.

Business owners and employees are learning of the scam when they receive claim notifications from state unemployment agencies. Active employees may ask employers why they received a notification, or may contact already overloaded unemployment agencies for an explanation. Some victims could possibly be unaware until they receive a 1099-G next year to file with their 2020 tax returns.

The U.S. Secret Service, federal and state law enforcement agencies believe this is the work of an international financial fraud ring. These hackers appear to have collected a significant amount of detailed personal information that allows them to file unemployment claims that look legitimate. 

Here are things your business can do now to combat this fraud scheme:

  • Actively review and verify all unemployment claims.
  • Report any fraudulent claims for current or former employees who are ineligible to receive benefits to your state employment agency and law enforcement.

You can also offer employees suggestions to prevent the possibility of their Social Security numbers being in this fraud going forward:

The HORNE Cyber team is available to provide an objective review of your systems’ security measures that protect your employees’ personal information. We can also offer a risk assessment on your remote workforce IT controls, as the pandemic caused most companies to prioritize remote access to data and machines over controls.

If you want more information or to schedule a review, contact your HORNE account team.   

For all the latest resources and insights to help your business navigate the changes caused by the coronavirus pandemic, check out our COVID-19 Resource Hub.

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