3 minute read
An Employer's Role in Reporting Suspected Fraudulent Claims
BY KARRYL HUBBARD
As Federal Pandemic Unemployment Benefits begin to phase out this fall, the Delaware Department of Labor’s Division of Unemployment Insurance (DUI), and unemployment insurance agencies across the country have experienced a marked increase in the number fraudulent claim attempts. In response, we are focused on enhancing our systems and processes to help combat these sophisticated fraud attempts.
To do that, we need both the business community and the public’s help to thwart the highly organized groups of criminals determined to steal money that rightfully belongs to those who are unemployed through no fault of their own and those independent contractors who became eligible for Pandemic Unemployment Assistance due to COVID-19.
Since April of this year, a number of Delaware businesses have contacted DOL regarding letters they’ve received about unemployment claims made by people who either have never been employed with the company or those who left the company’s employ years ago. If you received such a letter, you are not alone. We have had calls from hundreds of employers facing the same claims.
As of July 20, DOL has identified 25,149 cases of suspected fraud claims due to identity theft since the beginning of the pandemic. In response to the high volume of calls our Fraud Unit is receiving, we implemented a process for employers to follow in reporting these incidents.
When a claimant files an initial claim for benefits, they provide information on where they last worked. Based on that information, a notice to the employer is generated.
That notice is the first time employers can determine if a former employee has either misrepresented their issue (e.g., reason for separation) or if someone has a fraudulent claim using that employers name.
The employer’s role in reporting suspected fraudulent claims is critical. Please do not ignore these notices as there are potentially negative impacts to an employer’s taxes. The best way to avoid fraudulent activity being charged against an employer’s account is to have employers take the following measures to help shut down the fraudulent activity:
When reporting fraud, the employer should provide the following:
• the alleged employee’s full name
• the employee’s mailing address
• the best contact information for the employer and the employee
• the last four digits of the employee’s social security number
If the employee is still employed with the business, encourage the employee to file a police report and log onto https://www.identitytheft.gov/ Unemploymentinsurance
For more information about UI Fraud, go the DOL’s website: https://labor.delaware. gov/divisions/unemployment-insurance/
Last month, a Michigan woman was charged with running a nationwide unemployment scheme during the height of pandemic, stealing $450,000 in unemployment payments using people’s social security numbers. The woman and her accomplice filed at least 66 fraudulent unemployment claims. This one example demonstrates how critical your help is in responding to notices received from the Division of Unemployment Insurance.
Our entire team is working hard to respond to this unprecedented surge of illegal activity. We are continually reviewing our systems and processes and incorporating new security screens to help catch these erroneous filings. These efforts appear to be bearing fruit.
In April, we began to see an increase in the number of fraudulent claims. Based on internal changes to our processes and alerts from those employers responding to our notifications, these attempts are trending downward.
In addition to Delaware employers, we are working in cooperation with other states, the Inspector General’s Office for the Federal Department of Labor, and our own Department of Justice to stop these fraudsters.
Working together, we are making a difference.
Karryl Hubbard is Delaware’s Secretary of Labor.
