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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."
From TFA:
With all the theft of personal information in the news lately, and considering that a large percentage of this stolen information was Social Security numbers, it might be easier to compile a national database of Social Security numbers that haven't been stolen. ^_^
Seriously, though, this is just yet another good argument to ditch the Social Security number system entirely...it's clearly not working. Essentially, with just one number, you have a system where the SSN is both the public and the private part of the ID, and as any security professional can tell you, that simply is not a workable model.
____
~ |rip/\/\aster /\/\onkey
This Malda guy next door has been unemployed for so long I don't think he's ever gonna get a job.
I wonder how much this kind of fraud contributes to artificially(?) raising the unemployment rate. Maybe it's quite a bit lower than the reported rate due to the fraud?
Fly me to the moon Let me sing among those stars Let me see what spring is like On jupiter and mars
To which extent do they actually check that the person is in fact unemployed? Certainly, a person-to-person talk should take place before they hand over money just like that? Perhaps this is a bigger problem in their system as identity theft appears to be one of many ways to exploit that system.
see a Text Widget
Life's not that simple. For every person ripping off the unemployment system there are 9 others who actually need it. Well, that is unless this new type the article talks about takes off...Maybe people will actually start to enforce proper management of the system?
"A truly wise man realizes he knows nothing."
They are only copying someone's identity after all. The original person still has their identity, so it can't be considered "theft" :D
I don't see it included in the story.. it sounds like such a great deal for those with initiative, I have to ask if this is illegal?
When the author referred to the victims of this crime as being the government agencies and not the taxpayers, I stopped reading.
What?
Those checks have to be mailed or deposited somewhere right? Wouldn't it be fairly easy to catch these people "red handed" picking up their checks or depositing the checks in their account? What about withdrawing it? It all leaves a trace..
No doubt lots of fraud going on but simply having the SSAN isn't all you need. You would also need at least some employment history data.
Instead of another central database which conveniently aggregates all your personal information in one place, ripe for the hacking, what we need is a law passed that requires companies to remove the SSAN from their databases. All of them. The company can replace it with a unique identifier if they want but there is no reason for them to have the SSAN in the first place. Yes, I know it's the one number everyone remembers when someone is trying to identify you, but that is a poor reason for every database on the planet to contain such an important identifier. Let's develop a better way to authenticate someone, why don't we?
The NSA: The only part of the US government that actually listens.
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.
Quick? 26 weeks? Plus the start up overhead of several weeks?
Infuriate left and right
It seems like it would be trivial to scan a database for recurring addresses -- sure, there might be four people in a two-bedroom apartment collecting unemployment. But fifty? A hundred? Send an investigator out to talk to anyone living at an address with more than (e.g.) six registered names. If nothing else, he can interview all six of the people and see if there's a systemic problem keeping them from getting work in an area.
Two things bother me about the article, however:
1) The person calling our attention to this problem is a software vendor. He runs a payroll software firm, and probably has some financial interest in fraud-detection software. If nothing else, his byline contains an advertisement for his company.
2) He doesn't really present any evidence for the problem other than hearsay from an official in Washington State. Neither of them presents any real numbers.
I think it's wise to prevent this problem, and shore up any weakness to this exploit that may exist, but it's also important to be sure that a problem exists before demanding that the state take action.
Quick compared to what? Bank robbery?
Send email from the afterlife! Write your e-will at Dead Man's Switch.
Right, and then those people will have children that go hungry while at the same time they're stealing your car radio and mugging your wife after she gets off work in the evening because they're unable to both look for work and keep a roof over their kids' heads at the same time.
Welcome to reality, where criminals are real people and economic crime doesn't stop just because you say "Hey, wait, it's a free market! This isn't fair! Why don't you get a job?"
STOP . AMERICA . NOW
An unemployment claim that is fraudulently made on a stolen Social Security number would be easier to detect if there were a national database of stolen Social Security numbers.
Right... Hacker target number one. Ah, but maybe they've thought of this.
Again FTFA:
If and when a database is created, the only caveat is that it must possess airtight security features.
Right... See, humans will be involved somewhere, and humans can be corrupted just as easily as databases (and perhaps more so). The database will have a lookup function or it's worthless. So who will get access? Only state unemployment offices? How about credit card companies (think MasterCard)? And won't banks want a piece of this, too?
But wait, there's more. What about employers? They certainly wouldn't want to hire somebody who is using a known stolen SSN. Ok, so employers get access. It wouldn't be fair if it weren't every employer, from massive multinationals to the mom-and-pop store on the corner. Every one of these organizations will have the ability to lookup information from this database.
FTFA one last time:
At the current time, this initiative isn't even being discussed in the halls of Congress
Let's just hope it stays that way.
In my state, the checks are mailed.
I don't respond to AC's.
The author only addresses how to detect and punish the fraud when it happens as opposed to preventing the fraud. Here is a much better idea: Force those wanting unemployment to travel to the unemployment office in person, scan a fingerprint with a modern scanner, take their picture, and record the SS#, age, and name. This will prevent two individuals from ever claiming the same identity, or a single person from registering multiple SS#s.
In my state, you unemployment is based on the last job you had (or jobs). They look at like the last 6 - 24 months or something. A company has the right to appeal as well. I'm not sure how one would defraud in this case. Joe Schmoe files against Acme Widget. Acme Widget says either a) He never worked here, b) wait, he still works here! (if say the phisher knew he worked there), or c) we don't think he's entitled.
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.
Maybe some states are more lax, but I know here in Missouri, there's no way you'd "easily get away" with this type of scam.
For starters, you're required to do an in-person reporting to your local unemployment office every 4 weeks. Until you do, your benefits cease, and not showing up for the in-person reporting after 2 weeks go by terminates your benefits.
Also, the maximum benefit amount they pay out in Missouri is $250 per week, not $400 like the figures used in the article.
To top it off, they also require that you apply for at least 3 jobs per week and keep a log of your contacts. True, they may or may not ever really look at this - but they reserve the right to. (I don't know exactly how that policy works, but I'm guessing maybe they randomly select people from the pool of benefits-seekers to come in and show them the log of contacts.) And in some cases, applicants for benefits are also required to go through other processes, such as spending time each week in their "resource room", using their computer database to job hunt.
So, in the very recent past, they WERE willing to accept a job and their skills WERE useful.Again, they were considered "useful" in the very recent past.
By your "logic", there would never be any unemployment because the only people who would be counted as "unemployed" would have skills currently needed by business and a willingness to work for those businesses. So why would they not be hired by those businesses?
And before you talk about demanding too much money, the businesses would only have to offer them more than they'd make on unemployment.
Which doesn't leave much rational for "unemployment".
I usually try to refuse. Once at a Sprint PCS store, the clerk went along just fine - when 111-11-1111 wasn't accepted by their system, he tried 000-00-0000 and it took it.
Another time, a different cell phone company wanted my SSN, I said "no", they said "no". I wanted the phone, so I said "fine" and gave them a slighly different number from my true number... a few minutes later, they asked if it was correct - apparently the credit check didn't go thru. Alas, in that case I had to relent.
But in general, I make no effort whatsoever to keep my consumer information records "clean".
If it is for my benefit for my information to be right, then I keep it correct. If it is only for the convenience of others, I don't care if my name is spelled wrong, my DOB is off, or my SSN is munged.
I also enjoy saying "no" whenever a retail clerk asks something simple like "may I have your zip code?". Most just shrug, but every once in a while you get one that is truly surprised, and in those instances watching their reaction is amusing.
This issue is a bit more complicated than you think.
I keep trying, but it's rejecting my mail! Something about SenderID.
Since I'd rather not mod down incorrect responses to your question, I'll just post an answer. Short answer is 'No'. Long answer follows.
The unemployment rate is calculated by the Bureau of Labor Statistics based on two *surveys*, a household survey and an establishment (business) survey, with the household survey being used for the unemployment percentage, currently 5.1%. Basically, A person is considered 'unemployed' if they don't have a job *AND* they are looking for one. If they're not working but not looking, they don't count (removed from the both the numerator and denominator of the unemployed % because they're not considered part of the labor force). See here for more details
http://www.bls.gov/news.release/empsit.tn.htm
Specifically, "The unemployment data derived from the household survey in no way depend upon the eligibility for or receipt of unemployment insurance benefits".
Occasionally, the news will report on new initial unemployment claims filed as another indicator of the job market, and those numbers would be affected by fraudulent claims, but that's the extent of it.
Imposing Libertarian views on everyone online since 1992.
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.
Speak truth to power.
It's over due, everybody should get them. Best if they are across the forehead, but if you went to Aruba and got a deep tan it may make it hard to run you thru the scanner. Don't you just hate it when these thing don't scan?
Sorry about the writing. Robot fingers, you know? Cliff Steele in DOOM PATROL #23
To clear my less-than-perfect post a bit:
Stolen passwords or cards can be retired, while compromised biometric data will haunt you forever.
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.
What part of "shall not be infringed" is so hard to understand?
I hate to call FUD, but something is wrong here. Even if I stole 1000 numbers, had all the other information I needed to go with them, at most, 50 of those will turn out to be eligible, and maybe not for the full $400. You have to file every single week of those 26 weeks. Then you have to convert a check with someone else's name on it... and it's been forever since I've been able to cash even a payroll check anywhere without an account. Hell, even the grocery stores that used to do it won't anymore.
100 checks, would require 100 visits to unemployment offices, there are maybe a dozen in my city, that means at least 8 people visiting. Lots of potential for someone to notice a familiar face.
I just don't see how this happens.
They point out how almost everywhere, the claimant needs to claim in person... to have too many false faces is to share to wealth too widely, so why aren't they picked up by the staff working in the unemployment offices themselves?
Or is the fraud itself being exaggerated? Perhaps if there is a fraud, it's an internal one.
Wikileaks, no DNS
Most companies are so after your business I wonder if they would ever take the trouble to hunt you down. You could always claim stupidity if they called you back - I usually just transpose a few digits when I know the request is bogus. It would be an intersting experiement in separating people who really use it from those who just ask for it for the hell of it.
/.-ers) and people who ask for it and truly don't need it will usually comply. In most jurisdictions, it's not even legal for them to ask for it unless they plan to use it for a credit check.
I really think people don't check. Hell I have had root on hundred of boxes at big banks and ecommerce companies and according to my free credit reports none of my employers has ever asked for a credit report, at least from Experian.
Does a query like that even show up?
If an employer makes a query to one of the big three does it show up on the other two's systems?
I'm not endorsing the practice. Just be insistent and don't be an asshole (I know that's asking a lot of
Give a man a fish and you have fed him for today. Teach a man to fish, and he'll say "WHERE'S MY FISH, YOU IDIOT?"
You are correct - I could argue that most bank's CIPs already conformed to the Patriot Act but I won't disagree with you aftre doing a little more research; since the FDIC has issued guidance on the subject it looks like the Patriot Act has gotten its grubbly little fingers into a lot of new places, not just the highly publicized or obvious ones:
4 04a.html
x .html
http://www.fdic.gov/news/news/financial/2004/fil0
The FDIC Financial Institution Letters make interesting reading in general:
http://www.fdic.gov/news/news/financial/2005/inde
Give a man a fish and you have fed him for today. Teach a man to fish, and he'll say "WHERE'S MY FISH, YOU IDIOT?"
At any rate, I can't imagine this is a pervasive crime. It's not like you can just submit a SSN online and receive $400 in your mailbox each week. They need to verify that you were working, how long you were working for, that your employer was paying your unemployment insurance, that your employer does not contest your unemployment claim, and that your employer terminated you through no fault of your own.
There is no way this is happening on a mass scale.
"Avoid employing unlucky people - throw half of the pile of CVs in the bin without reading them." -- David Brent