We are now six months into the COVID-19 global pandemic and Unemployment Insurance (UI) claims have hit record highs. The California Employment Development Department (EDD) has processed historical levels of Unemployment Insurance (UI) claims in that time, totaling approximately $59.8 billion in UI benefits. With this level of payout comes an increased risk for fraudulent claims. On Wednesday, September 2, California legislators called for an emergency audit to determine the backlog of applications as well as how many fraudulent claims have been filed and paid.
One concerning form of UI fraud comes when an imposter gains access to an individual's social security number and files for UI benefits using their information. The imposter is able to file for benefits but divert the funds to their own personal account.
To prevent fraudulent claims, employers must take action. All incoming EDD forms should be reviewed for accuracy. Ensure each social security number matches your records, the employee's name is spelled correctly, and the last day of work is accurate. Your employee and you as the employer should each report the fraudulent claim or suspicious activity using the EDD fraud reporting function.
If a fraudulent claim has been made using a real social security number, your employee may be vulnerable to identity theft. Placing a credit freeze and requesting a recent credit report are two immediate steps to help prevent further unauthorized activity. Additional resources can be found on the Federal Trade Commission (FTC) website. Contact a member of the consulting team for guidance on how to handle a potential fraudulent UI claim.