Unemployment Benefit Scams Are on the Rise.
During the pandemic, millions of Americans have filed for unemployment benefits due to job loss and reduced work hours.
Unfortunately, scammers are taking advantage of the pandemic and fraudulently filing unemployment claims using stolen personal identity information.
If you receive a 1099-G tax form for unemployment benefits that you didn’t apply for or receive, you may be a victim of identity theft.
How to protect yourself from unemployment benefit scams
Learn the four steps you can take to report unemployment benefits fraud and protect yourself and others.
What to do: Follow these four steps to report unemployment benefits fraud and to protect yourself:
- Report the fraud immediately to the unemployment office in the state where it occurred. If you did claim unemployment benefits and know the amount listed on your 1099-G form is incorrect, ask your state unemployment office for a corrected 1099-G.
- File your federal tax return and include only the unemployment income you received. You don’t have to wait to receive a corrected 1099-G . The IRS also recommends getting an Identity Protection (IP) PIN to prevent anyone from filing a federal tax return using your Social Security Number.
- Monitor your credit for any other fraud. During the pandemic, you can check your credit reports each week for free . The FTC also recommends you either request a free, one-year fraud alert or freeze your credit with the three credit bureaus.
- Help stop future unemployment identity fraud by filing a federal complaint with the U.S. Department of Justice’s National Center for Disaster Fraud or calling 1-866-720-5721.
Suspicious transactions and deposits
Some people have reported receiving prepaid cards in the mail with unemployment benefits that they didn’t apply for. Others have reported suspicious transactions and deposits in their bank accounts involving unemployment benefits. Once you receive the funds, a scammer may contact you, pretend to be from the government, and tell you the benefits were deposited by mistake. They will then ask you to send them the money .
What to do: If you receive an unexpected prepaid card for unemployment benefits or see an unexpected deposit from your state in your bank account, report it right away to your state unemployment insurance office and your bank or credit union. If you believe you have been the victim of identity theft, report the incident to your local police and the Federal Trade Commission (FTC) .