Detecting and Reporting Fraudulent UI Claims: Fighting UI Fraud is Everyone’s Job

The COVID-19 crisis has made the environment ripe for fraud.  States’ UI systems are being overwhelmed with record numbers of new and weekly claims; they have staffed up rapidly to process claims; however, there has not been time to train new or contracted employees on how to identify suspicious claims. With an urgency to pay claims quickly, states have waived their one week waiting period. The waiting period is used by states to validate and investigate claim eligibility; and with many employers working remotely, no one is there to timely respond to the UI notices that come by mail.

Savio HR has contacted the Mississippi Department of Employment Security (MDES) of fraud attacks we have identified and was informed that they are working to secure their unemployment program from fraud.  To prevent this crime from becoming rampant, employers must be on the front line of defense.

It is vital to understand the differing types of UI fraud to be aware of as an employer. Some types include: filing for UI benefits while working, making false statements to receive or increase UI benefits, not reporting refusals of work or job separations, falsifying work searches, failing to report ability and availability for work, helping others file a fraudulent claim, and using someone else’s identity to file a claim for UI benefits. The cost of UI fraud is astronomical and can be explored by state using this link: https://www.dol.gov/general/maps.

A major outlet through which UI fraud occurs is identity theft wherein hackers breach large databases that contain massive amounts of Personally Identifiable Information (PII).  Hackers then sell PII to other criminals who use the information to file for UI benefits, IRS & State Tax returns, and apply for credit under the identity theft victims’ name.  Other forms of theft happen via phishing emails, public records, online ads, surveys, and contests.

If fraud is suspected, we highly encourage you to immediately follow these steps:

• When Notice to Employer of Claim Filed is received on a current employee with no change in status:
  • Contact employee to see if they filed a UI claim
• If yes, promptly and accurately complete UI-21 and return it to MDES
• If no, let employee know that someone has filed a claim using their PII
• Provide employee with documents to report fraud to MDES
• Send email to safe@mdes.ms.gov reporting fraudulent claim
• Request MDES invalidate/cancel the fraudulent claim
• Complete and return UI-21 to MDES stating “Fraudulent Claim. Employee states they did not file a claim for UI benefits.”
• If employee informs you that they received correspondence from MDES and have not filed a claim, follow steps 3 through 6

Instructions for employees are as follows:

• File a police report
• Complete Identity Theft Affidavit from Attorney General’s office
• Within seven (7) days, of receiving a notice that a fraudulent claim has been filed, email
• Police report
• Identity Theft Affidavit
• Copy of driver’s license or state-issued picture ID
• If a debit card has been received, email a legible copy of the front and back of the card
• Destroy the debit card immediately to prevent activation
• Email all information to safe@mdes.ms.gov

Filing a fraudulent claim comes with penalties that range from criminal prosecution to repayment of benefits plus penalties and fines to losing eligibility to collect UI benefits in the future.

Reminding yourself that you, the employer, are the first line of defense against UI fraud is crucial.  Having the knowledge necessary to identify UI fraud is essential to protecting your business from losing immense amounts of money.  To learn more, check out the Savio In The Know articles posted on our website.

It is our job to make your job easier and our goal is to exceed your expectations. 

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We are available to assist with any workforce problem or question.