We continue to track the increase in fraud through our Financial Hardship Studies. As of our latest report, 35% of consumers said they were either the targets or victims of a digital fraud attempt. As hardship continues for many families, particularly through the COVID-19 pandemic, fraudsters capitalize by evolving their tactics to match the times. Most recently, unemployment insurance fraud has become a popular scheme.
Unemployment insurance fraud happens when someone uses your personal information to file for unemployment benefits in your name. Victims of this scheme may only find out when they receive notice from their state unemployment insurance agency, employer or if they try to apply for unemployment themselves. Unemployment benefits don’t appear on your reports and unemployment doesn’t directly impact your credit score.
However, if someone is able to apply for benefits in your name, it means they have pieces of personal identifying information that can be used in ways beyond unemployment insurance claims, like opening new credit accounts in your name. This is why it’s important to review your reports for accounts that you did not establish.
If you’ve been a victim of unemployment insurance fraud, it’s important to take action quickly. Below is a guide for where to report it and steps you can take to protect your credit report information.
Where to report unemployment fraud
Promptly reporting identity theft will help you get on the road to recovery and limit any delays in receiving future benefits should you need them. The Federal Trade Commission has a special recovery plan for unemployment fraud victims which includes an identity theft report. This plan provides pre-filled forms and will help you complete letters you can use when contacting business and agencies to report the fraud.
- Your state’s department of unemployment security
Each state has its own process for reporting fraud. For some, you’ll be able to complete a form online. The U.S Department of Labor provides a consolidated list of links of where to report unemployment insurance fraud for each state.
- Tell your employer
Your workplace will need to be on the lookout for notices about unemployment claims filed by current employees. You may know about the fraud before they do and they’ll need to report it as well, so it’s important to keep them in the loop.
- File a police report
Contact your local police department to file a report of the fraud. Some banks may require a police report for their account recovery process. An official report provides you additional documentation, allows the case to be investigated and assists authorities in identifying recurring fraud in their area.
How to protect your credit report
If you’ve been the victim of identity theft, you should take action to safeguard your data identity. Free protections and resources are explained in the Fraud Victim Bill of Rights. Make sure to read your credit reports thoroughly and check for accounts you don’t recognize.
- Place a fraud alert on your credit report
Fraud alerts tell lenders to take extra steps to verify your identity before extending credit in your name. You can add an initial fraud alert to your credit report immediately. An initial fraud alert will stay on your report for one year. If you provide a letter from your state unemployment office or law enforcement report confirming you were a victim of unemployment fraud, you can request an extended fraud alert, which remains on your file for 7 years. If you place a fraud alert with TransUnion, we’ll contact Equifax and Experian so they’ll add one on your reports with them as well.
- Consider freezing your report as well
A credit freeze prevents lenders from accessing your report, which stops new accounts from being opened. Freezing your credit is free, doesn’t impact your score and can be lifted easily when needed. If you want to freeze your credit, you’ll need to contact each credit reporting agency individually to place a freeze and to lift or remove a freeze.
- Dispute accounts that are the result of fraud
If you see an account or item on your report you don’t recognize, you can start a dispute and the credit reporting agency will investigate it. Disputing with TransUnion online is fast, easy and free. When disputing, it’s helpful to provide support documents like your identity theft report or a police report.
Realizing you’re the victim of identity theft is a scary experience that can leave you feeling vulnerable as you try to uncover the extent of the impact. We know it can be a journey recovering from fraud, but TransUnion is here to help you along the way. We’re committed to helping you manage and take back control of your valuable data identity.