Unemployment Fraud Continues to Thrive
The Illinois Department of Employment Security (IDES) has reportedly stopped around 1,000,000 fraudulent unemployment claims since March of 2020. That number continues to grow at an alarming pace. There are many consequences when a fraudulent unemployment claim is filed including:
- 1099-G forms sent to the victims of the fraud, creating a false tax burden.
- Inability to file a legitimate unemployment claim.
- Higher unemployment rates for the employer.
- Billions of taxpayer dollars given to fraudsters.
Fortunately, there are several steps that your business and employees can take to curb its effectiveness. Just as with other types of fraud, it is important to remain vigilant and report it right away.
- Notify IDES of the fraud by calling 800-814-0513. Note that they are overwhelmed and working on a ‘callback only’ model. The timeframe to get a callback may be several weeks. Fraud victims can also report online at: https://www2.illinois.gov/ides/Pages/Report-Identity-Theft.aspx#IDimage.
- Elect to receive employer ‘Notice of Unemployment Claims’ electronically though the SIDES E-Response system. You will receive an email whenever there is a new claim for anyone that has recently worked for your business. If they are a current employee or you are otherwise aware that is it a fraudulent claim, make that obvious in your response by including an attached letter on company letterhead.
- If a claim is filed for a current employee, notify them that someone has filed an unemployment claim in their name. Advise them to report this to both IDES and their local law enforcement agency.
- Advise employees to enroll in a credit monitoring service, setup fraud alerts and freeze their credit reports with Experian, Equifax and Transunion to prevent unauthorized accounts from being opened with their social security numbers. A freeze will prevent lenders from being able to do a hard credit pull, which is required to open new credit cards, car loans, mortgages, etc.
- Affected individuals should also be vigilant that no false tax returns or social security claims are filed in their names.
Fraud continues to cost taxpayers, individuals and businesses infinitely every year. If you think your business may have internal or external fraud occurring, contact Mitch Cohen at firstname.lastname@example.org. In addition to being a Partner at Bronswick Benjamin, Mitch is a Certified Fraud Examiner (CFE) and President of the Forensic Expert Witness Association.
——————- Disclaimer: The information contained in this Blog (the “Blog”) is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. In no event will BB or its partners, employees or agents, be liable to you or anyone else for any decision made or action taken in reliance on the information in this Blog or for any consequential, special or similar damages, even if advised of the possibility of such damages.