Many people have heard of unemployment fraud, but they may not be aware that it can take on so many different forms. When we think of UI fraud, we probably envision someone who is collecting unemployment but working “under the table” for cash, working a part-time job and not reporting it, or falsifying their application so they receive more benefits than they’re actually eligible for. But there’s a separate yet related form of unemployment fraud, and even though it actually falls under identity theft, the end result is that the victim is the one who looks like a thief.
The stories below are representative of the types of calls that come into the Identity Theft Resource Center’s toll-free call center each and every day. The names have been changed.
“I was called into my supervisor’s office one Friday afternoon and told that I was being let go. A report had come to their attention from the state unemployment office, telling them that I was receiving unemployment benefits. They had contacted the state office to inform them that it was a mistake, and that I was actually working and receiving my salary, but the benefits office showed that I had received thousands of dollars. I eventually was able to plead my case and make my company see that I wasn’t stealing benefits, but this was a Friday. I spent that whole first weekend wondering not just who had my identity and what they were doing with it, but wondering how I was going to pay bills without a job. It was the worst weekend of my life.” –Nancy, 32
“When my employer found out that I was supposedly collecting unemployment, he was furious. It wasn’t just a matter of losing my job… that was already a done deal. It was the threat that he was going to turn me over to the police for being a thief. And I can’t say I blame him, since whoever did this was stealing from all the rest of us. I even showed my boss my bank statements and credit card bills to make him see that I had not been collecting money I wasn’t entitled to, and that felt really horrible. I kept thinking to myself that I shouldn’t have to do this to prove that I’m not a thief. Even though my boss apologized and I still have my job, it hurt that he could think I would do something like this after all the years I’ve worked for him. The damage has been done, and things haven’t been the same at my job since.” –Edward, 51
“I had worked for a small locally owned company for eight years, but when the owner was ready to retire he sold the business to a competitor. Unfortunately, the other company already had someone in place to do my job and they didn’t need my position. I applied for unemployment, but my application was rejected because someone else was already collecting benefits in my name! Not only did that stop me from getting any help—I had to borrow money from my parents just to pay my bills and buy groceries that month—when I checked my credit report to see what else this thief had done with my identity, I found three credit cards in my name that obviously hadn’t been paid on. My credit score was absolutely in the toilet, meaning I couldn’t even rely on my good credit to help me out while I was between jobs.” –Lisa, 38
The damage that this kind of fraud does is unimaginable. Unlike other forms of identity theft where the victim is clearly innocent (such as credit card fraud committed in another city, or purchasing a vehicle that the victim obviously doesn’t own), UI fraud can cause others to raise eyebrows and question everything you do. Due to this lack of proof, this kind of violation can be especially hard for a victim to get over; it’s not just his finances that are affected, but his good name as well.
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