The presence of unemployment-related scams has grown in the wake of the coronavirus (COVID-19) pandemic. Current unemployment scams include both fraudulent claims and unemployment-related phishing attempts. As many employers are currently dealing with the reality of a high amount of unemployment claims, organizations can take steps to prepare for fraudulent activity and to accurately identify legitimate requests. By taking proactive steps and preventive measures, your organization can be best prepared to identify and, if necessary, respond to fraudulent activity.
The Presence of Unemployment Scams
According to the U.S. Federal Trade Commission (FTC), scammers often file fraudulent unemployment claims, sometimes even for people who are not unemployed. And, unfortunately, many scams are not revealed until it is too late. Many scam artists may not even be located in the United States. With the coronavirus pandemic leading to unemployment rates as high as they’ve been since the economic crash in 2008, more unemployment claims are being processed than ever before. Scammers seek opportunity, and this niche has received enough attention to warrant a fraud alert from the FTC.
How Unemployment Scams Happen
Unemployment-related scams can happen to a current or former employee—regardless of an employee’s role at an organization. While scams were also present pre-coronavirus, current unemployment scams primarily fall under the following categories:
Employers should be prepared to identify these types of fraudulent activities. By educating workforces, reviewing emails with caution and preparing appropriate scam responses, organizations can be better prepared for attempted fraud.
Preventing Unemployment Scams
Employers can take certain steps, such as the following, to help prevent fraudulent activities:
Employers should be aware that there has been falsified information about unemployment scams being shared on the internet. Federal agencies, including the FTC, generally provide the most accurate and up-to-date resources.
Organizations can take steps to prevent fraudulent activities—appropriate efforts will vary due to unique aspects of your workplace, but proactive measures such as increased awareness can be an effective first line of defense.
Identifying Unemployment Scams
Government agencies and state representatives have standardized forms of messaging, which can be recognized by going through proper steps. According to a fraud alert issued by the DOL, the intent of phishing scammers is to have email recipients log in to an illicit account that impersonates the users’ personal accounts in order to steal various account numbers, passwords and Social Security numbers. Here are key points that employers should consider when receiving emails or evaluating unemployment-related internal practices:
Responding to an Unemployment Scam
While employers and employees hope to avoid being victims of a scam in the first place, a timely and well-planned response can minimize damage and sometimes even prevent future fraudulent activity after a scam attempt does occur. The FTC offers the following steps for how to respond to a scam attempt:
Protecting Your Workplace
No workplace is immune to the threat of scams, and now is as good a time as ever to ensure your organization is taking adequate steps to both prevent and respond to any fraudulent activity. Employers should continue to follow guidance from the FTC and consult with local legal counsel when updating or changing policies.