Guard Against Unemployment Scams

First Republic Bank
September 11, 2020


During the COVID-19 pandemic, many people have submitted unemployment insurance claims — without even realizing it.

The FBI is reporting a spike in criminals using stolen identities to submit fraudulent unemployment claims online.1 Often the victims learn about the incident in a startling way. They receive an IRS Form 1099-G, indicating the unemployment benefits they’ve purportedly received. Or they / their current employer receive a letter from the Department of Labor (or a state employment agency, such as the EDD in California) asking them to verify their identity to properly file the fraudulent unemployment claim.

Unemployment insurance fraud cases were already on the rise. However, COVID-19 worsened the situation. The additional $600 the federal government added to state benefits gave fraudsters even more incentive.

A recent survey found that over one in five Americans have been contacted by scammers about stimulus payments or unemployment benefits during the pandemic.2

How the scam works

Fraudsters buy stolen personally identifiable information (PII) online from previous data breaches. They also pull information from public websites or social media accounts.

When criminals obtain an individual’s PII, they often cold-call or use phishing schemes —fraudulent emails, phone calls or text messages designed to look like they’re from legitimate sources — to trick victims into volunteering additional personal information they need to file an unemployment claim. They then will file a claim, with that personal information, to the Department of Labor for unemployment benefits.

In some cases though, fraudsters target people who have already submitted legitimate unemployment claims. For example, scammers pretending to be from the U.S. Department of Labor will send a text or an email or leave a phone message telling victims that the unemployment claim they filed was incomplete. The victim will then be asked to provide a Social Security number, a birth date or other information to complete their claim.

Sometimes an email will include a link to an official-looking site that downloads malicious software on the victim’s computer to steal information.

Another common tactic is telling victims that their unemployment benefits have been suspended and that they must provide their credit card number or PIN to reactive it. In reality, fraudsters are hoping to trick the victim into providing additional information, in order to steal money.

When fraudsters file a false unemployment claim (once they have the victim’s information), the money is usually sent to an account they control. Sometimes, however, the funds are sent to the victim’s real account. In this case, fraudsters may contact the victim claiming to be from the state unemployment agency. They’ll say the money was sent by mistake and ask the victim to return it, sometimes through an unusual means like a gift card.3

Have a strong defense

The best defense against identity theft and unemployment scams is to be aware of the techniques fraudsters use and cautious about providing information.

  • Do not provide or validate personal information for requests you didn’t initiate.
  • Don’t open attachments or click on links from senders you don’t know.
  • Review your bank accounts and credit reports for any suspicious activity.
  • Ignore communications asking you to wire money, send cash or put money on a gift card to “refund” erroneously sent benefits.

If you think you’ve been the victim of identity theft or this unemployment scam related to fraudulent unemployment insurance claims, immediately report the matter. Contact the Federal Trade Commission, state unemployment insurance agencies, the IRS, credit bureaus and your employer’s human resources department.

During difficult times like a pandemic, scammers prey on people’s fears and vulnerabilities. That means you need to be even more diligent about protecting your personal information.

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1FBI press release,

2“Beware of Robocalls, Texts and Emails Promising COVID-19 Cures or Fast Stimulus Payments,” AARP,

3“Is a scammer getting unemployment benefits in your name?” FTC blog,