Identity Thieves Drain Unemployment Benefit Funds

Makarand writes "According to a News.com.com article, the defrauding of state government unemployment benefit programs is the most underpublicized identity theft crime and the states are not doing much about it. Identity thieves are using stolen social security numbers to file false unemployment claims and collecting benefits because the states have no systems in place to deter fraud. In fact, it is easier to convert stolen identity data into money by filing false unemployment claims than going after the credit card companies." From the article: "File a false unemployment claim and you can receive $400 per week for 26 weeks. Do it for 100 Social Security numbers and you've made a quick $1.04 million. It's tough to make crime pay much better than that."

Comments

how can it be that easy?

[MattW]

In Texas, when someone files an unemployment claim, their employers within their "eligibility window" - ie, those they worked for the last X months (18? 24?) get notices. If their unemployment claim is granted (which requires they have been terminated not-for-cause, or that they quit for very specific few reasons, like harrassment), it is "debited" to the employer, and the employer's unemployment tax rate may go up as a result.

I can't imagine how they manage to file unemployment claims without the employers knowing and going to the person and saying, "What the heck? You're still employed." The jig would be up pretty quick. In Texas, the first phone interview includes a call to the employer(s) and takes place within days of the filing, probably before the first check is paid.

Since the unemployment fund is paid into through payroll deductions linked to the SSN, by the employer, I don't see how this could succeed, at least in Texas.

Re:Unemployment rate?

[daVinci1980]

No, that's absolutely not what the unemployment rate represents.

Unemployed persons (Current Population Survey)
Persons aged 16 years and older who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment sometime during the 4-week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.

(From the Bureau of Labor and Statistics Glossary)

Reaching the end of your benefits has absolutely nothing to do with whether or not you are counted as unemployed. You are considered unemployed so long as you are not working but were available to work and have actively been seeking employment.

BAD ADVICE Re:abuse of SSN

[spoonyfork]

Advise for everyone: start using fake SSNs and DOBs whenever possible

Good god someone MOD PARENT DOWN. Your advice is credit fraud which could get someone who has the fake SSN in trouble... as well yourself. Besides, if you provide correct information everywhere else you could have multiple SSNs tagged to your credit report which is evidence of fraud. BAD ADVICE, DO NOT DO THIS. If you don't want to provide your real SSN/DoB then don't give it out.

Re:Employees don't pay into UI

[Zak3056]

UI is funded through payroll taxes - the employer pays the tax.

I'm betting he's self-employed. The self-employed are the ones who get truly screwed by our tax system--they pay both the employer and employee halves of all payroll related taxes, and as a result are taxed double. His anger at the situation--particularly about being forced to pay 3x the allowable benefit for his insurance--is quite understandable, and completely justified.

Re:Easier the other way...

[cayenne8]

"Perhaps in another country, but not in the United States of America, it is not legal. Not without violating about 10 different laws, the HIPAA [hhs.gov] and dozens of various privacy policies guaranteeing that the information is NOT shared with third parties.If you have direct evidence of companies doing it, please speak up... because they're breaking the law. Please provide some actual evidence."

Dude...happens all the time. Take a look at Acxiom Corporation . That IS their business. I used to work there way back. They take information on people from the US, and when I left from around the world too...and put it together in massive databases. They get this info from states that sell drivers license info, US postal change of address forms, those mailers you send in for 'warranties'...hell, one project was ordering phone books from around the country, cutting the bindings off, running them through OCR's, and sorting and putting that info into databases. They used these databases to actually (for a fee) cleanse other companies' databases. They clean Visa and other databases all the time...they feed the credit unions...I know they had a close relationship with Trans Union back then.

They have information put together on a large (upper 90%) of everyone in the US. We were working on plans years ago to try to generate a unique ID of our own to track people in the US as they moved...got married...etc.

Heck, we had info on people with SS, income...and even if you wore glasses or not.

Trust me...there are companies that aggregate this data all up and down, all perfectly legal. Back when I was there...we were working on doing the same to people's data in Europe and other places on the globe.