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Identity Thieves Drain Unemployment Benefit Funds

Posted by Zonk on from the thanks-jerks dept.

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."

4 of 496 comments (clear)

  1. Tell me about it by Winckle · · Score: 5, Funny

    This Malda guy next door has been unemployed for so long I don't think he's ever gonna get a job.

  2. Check for actual unemployment? by moz25 · · Score: 5, Insightful

    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
  3. Ah, but are they really thieves? by Anonymous Coward · · Score: 5, Funny

    They are only copying someone's identity after all. The original person still has their identity, so it can't be considered "theft" :D

  4. Software probably can solve this by Jurph · · Score: 5, Insightful

    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.