Over the past two weeks, companies in Maine, Massachusetts and Rhode Island, have been receiving notices of unemployment benefits claims filed on behalf of employees who are still working and who did not file for unemployment. Impacted companies run the gamut of industries, from hospitals to accounting firms, and affected employees include a wide range of positions from groundskeepers to CEOs. Federal law enforcement estimates the national total amount of fraudulent claims nationwide could be as large as $500 million.

Capitalizing on the current emergency and the additional unemployment benefits provided for by the CARES Act, the scammers are filing unemployment claims using the Social Security numbers of individuals who are employed and therefore have not filed themselves. The scam has picked up speed over the course of the last week, with some companies receiving more than 100 claims in a matter of days. While reliable information regarding the suspected fraud ring is hard to come by, it appears to be hitting Maine, Massachusetts, and Rhode Island particularly hard.

What do I do if I am receiving fraudulent claims for unemployment for my employees?

Given the scale of the fraudulent activity, it is highly unlikely that the breach of personal information came from inside your company. However, there are several steps you should consider taking if you believe your employees are being targeted in this scheme:

• Confirm that the employee or former employee has not filed for unemployment benefits if you can;
• Notify the state unemployment office fraud department and provide the names of the affected employee(s);
  • Maine: www.maine.gov/unemployment/idtheft
  • Massachusetts: UIFraud@MassMail.State.MA.US
  • Rhode Island: DLT.uitdifraud@dlt.ri.gov
• Notify the affected employee(s) that their Social Security number has been compromised and advise them to:
  • Take steps to protect their credit, including locking their credit and other steps – a good reference is www.identitytheft.gov;
  • Hold on to any paperwork they receive from unemployment;
  • Do not use any benefits received (such as a Visa debit card) but hold onto the benefits for the investigation;
  • Be vigilant about any other potential impact on their finances.
• Consider notifying all employees that their information may have been compromised in an unemployment fraud scheme and ask them to be vigilant and to notify a company point of contact if they believe benefits may have been filed fraudulently on their behalf.