BBB Tip of the Week: ID Theft and Benefits Fraud

At the height of the coronavirus pandemic in April and May, hundreds of thousands of people lost their jobs. This led to an astounding increase in unemployment benefits claims filed across the country.

However, by mid-May, another story emerged: Con artists were filing fraudulent unemployment claims using consumers’ identities. Fraudulent claims were indeed mistakenly paid out, and thousands of people had to file identity theft reports with the government.

Now, we’re able to see the quantifiable impact of this fallout.

The Federal Trade Commission has confirmed that identify theft officially moved up to its No. 1 spot for fraud as of the third quarter, outpacing the number of reports it gets for imposter scams (i.e., fake phone calls and emails claiming to be from the Center for Disease Control or Social Security Administration). This was due in large part to the high volume of benefits fraud that occurred.

So just how many people were victims of benefits fraud? Data provided by the FTC shows in the second quarter alone, 349,641 ID theft reports were filed across the United States. Of those reports, more than 77,600 were specific to government documents or benefits fraud.

The greatest impact among states was in Washington. For context, Better Business Bureau Northwest and Pacific has highlighted stats for our region, including the number of unemployment-filing scams reported and the top-ranking identity-theft scam in each state, if not benefits fraud.

• Washington was at the epicenter of this scam and saw, by far, the highest number of unemployment filing scams. Benefits fraud accounted for 34,246 cases of ID theft reports.

• Hawaii also saw a high number of reports, with benefits fraud outdoing all other ID theft categories by a long shot – 691 cases were filed.

• Oregon only saw 240 cases of benefits fraud. In the No. 1 spot for Oregon instead was employment and tax-related fraud, coming in at 582.

• In Montana, benefits fraud was in the No. 1 spot for ID theft cases, totaling 217.

• Idaho saw 108 cases of benefits fraud. Credit-card fraud was in the top spot, accounting for 143 cases of reported ID theft.

• Alaska saw an extremely low number of cases, with only 36 reports filed for benefits fraud. The theft type that ranked highest was credit-card fraud, at a mere 58 cases.

Critical to all types of identity theft – whether benefits filing fraud or another type – is acting fast to remedy the situation.

BBB Northwest and Pacific offers the following tips:

• Report the fraud to your employer (if unemployment-related).

• Report the fraud to your state unemployment benefits agency, preferably online.

• Report to your banks and credit card companies. This is true across all types. Recovery steps include placing a freeze on your credit and using fraud alerts on all accounts.

• Report to IdentityTheft.gov to alert necessary agencies, including the FTC.

• File a Scam Tracker report with your local Better Business Bureau. For more consumer protection information, head to trust-bbb.org.