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The COVID-19 pandemic caused an unprecedented increase in unemployment claims throughout the past two years. While these claims have tapered off, many organizations and individuals are suffering the consequences of insurance fraud. Generally speaking, unemployment insurance fraud refers to intentional withholding of information in order to receive unemployment benefits. Fraudulent claims can involve submitting false information, continuing to collect benefits while ineligible, or collecting full benefits while not reporting wages or income. Throughout the pandemic, there has been an uptick in fraudsters stealing the identity of a real employee and applying for insurance benefits under that person’s name. These fraudsters will often open bank accounts in the stolen name and receive the fraudulent claims. While the Department of Labor is actively trying to block fraudulent claims, employers play an important role in stopping unemployment benefits scams.

Employer’s Role in Combating Fraud

When a worker files an unemployment claim, the former employer is notified by the appropriate state agency. The first and most crucial step in preventing any fraudulent unemployment claims from taking place is to carefully review employee details and compensation information. Fraudulent activity can often be identified during this step of the process. In addition, employers should take the following steps to help combat fraudulent activity and protect their employees:

Ensuring Employee Safety

Employers must ensure employee information is protected and kept confidential at all times. Fraudulent unemployment claims and identity theft can have severe consequences on their victims. RiskVersity helps employers mitigate the risk of fraud and ensure employee information is kept safe. If it’s time to increase your security efforts, we’d love to talk to you about your options.

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