One common form of identity theft is unemployment insurance fraud. This happens when someone else uses your personal information to file for unemployment benefits in your name, and they get the money. Though unemployment benefits do not directly impact your credit score or report, this type of fraud does prove that someone else has access to your personal identifying information and puts you at high risk for other forms of identity theft.
If you've received notice about an unemployment claim from your state's unemployment insurance agency, an employer, or had difficulty applying for unemployment benefits yourself, you'll want to take action quickly.
Here's what you can do to get this resolved:
1.Report the Fraud
Start at the source - your state's unemployment insurance agency. This will ensure that unemployment benefits are not disbursed in the first place. In some states, you may be able to report this online which typically speeds up the process. You can check the State Directory for Reporting Unemployment Identity Theft at the bottom of this U.S. Department of Labor webpage to find out how to contact the state agency.
Be sure to keep record of any conversations you have, including who you spoke with and when. If you are provided with case numbers, keep them in a safe place. You'll want to thoroughly follow the steps the agency gives you to make sure there are no loose ends.
Next, let your employer know that someone filed unemployment in your name. In some cases, your employer may be able to deny the claim before it gets fully processed. Again, be sure to keep any confirmation or record when doing so.
We also recommend reporting the fraud to the U.S. Department of Justice's National Center for Disaster Fraud (NCDF). Complaints filed with the NCDF will be reviewed and referred to appropriate law enforcement or regulatory agencies for investigation, as needed. You can file your report by completing an NCDF Complaint Form online, or by calling 866-720-5721.
2. File Your Tax Return
As part of the federal tax return process, you must report taxable income you received during the year. Though this may seem obvious, do NOT report income that you never received, specifically unemployment benefits. If you receive a tax Form 1099-G but didn't collect the benefit amounts listed on the form, you should contact the issuing state unemployment agency to request a revised form. This will help you avoid the chances of an unexpectedly high tax bill at the end of tax season.
3. Protect your Credit
If you know you have been a victim of unemployment insurance fraud, you'll want to keep a close eye on your credit. This will help ensure you're protected against other forms of fraud moving forward. **You can also read more in depth about How to Protect your Credit Report HERE.
Credit Freeze: This prevents lenders from accessing your credit report (unless you lift or remove the freeze), thus no new lines of credit approved.
Credit Lock: Similar to a credit freeze, a credit lock will block all access to your credit report; but, a Credit Lock takes place instantly, whereas a freeze can take a couple hours. You can enable Credit Lock when you sign up for Cyrus services.
Fraud Alert: This will require a business to verify your identity before it issues new credit in your name (i.e. a few extra verification steps in the application process).
Review your Report: If you ever see an account or item on your credit report that you don’t recognize, you'll want to dispute it with either the credit agency, or even better, the issuing lender.
The thought of identity theft can be scary, and we're here to help. If you have any questions about unemployment insurance fraud or identity theft in general, don't hesitate to contact the Cyrus Team today.