How employers can help stop unemployment fraud

January 25, 2021

Via the Northwest Colorado Workforce Center/Colorado Rural Workforce Consortium

With the rise in unemployment insurance (UI) claims associated with COVID-19, there has been a significant increase in the number of fraudulent claims and other instances of fraud or identity theft. Businesses and individuals have both been affected. Though CDLE has updated its Unemployment Insurance website to increase job seeker/employer access and has implemented additional security measures (a program update planned for several years), fraudulent activities are still rampant.

Additional information can be found on the Colorado Department of Labor and Employment (CDLE) website.

Employers are a great first line of defense

Please communicate with your employees about possible fraudulent claims filed in their name – they do not have to be unemployed to be a victim of fraudulent claim. As an employer, be on the lookout for any notifications from the state regarding unemployment claims.

Employers utilizing the state’s online MyUIEmployer platform can see claims against them, deny the claim, and prevent an improper payment from being sent out. This will also provide the impacted employee notice of the issue, and time to react.

Visit CDLE Fraud Prevention to submit a fraud report and to find additional resources, including Frequently Asked Questions for claimants and employers.

Visit the CDLE’s Employer Section, where employers can also access the Employer User Guide and other resources for businesses.

CDLE Fraud Prevention

When an employee is the victim

If someone files for unemployment in an employee’s name name, that employee’s identity has already been compromised elsewhere, and the false UI claim should be treated in the same manner as any other form of identity theft. (E.g. Equifax breach, Target Breach, Home Depot Breach, Starwood Breach, or any other number of high profile data breaches). 

In most cases, those committing fraud have predominately using data that was already previously breached OR data  that was readily available via general public information. NOTE: It was only recently (in the last 20 years or so) that safety measures were implemented surrounding the use of social security numbers, Pii (personally identifiable information) and other forms of data.

Next steps

If someone files a claim in your name or you receive a Reliacard card – The following steps are pretty important to complete. If the fraud is not addressed, the impacted employee could be liable to pay the UI money back, AND the employee may risk the inability to submit a future UI claim (due to a legitimate, future job separation).

Please follow the steps as outlined by CDLE. Much of these are standard identity theft procedures:

  1. Submit a Fraud report with the Division of Unemployment Insurance (this is internal to those systems)
  2. Deactivate the Reliacard and file a fraud report with US Bank or call US Bank at 855-282-6161
  3. File a Fraud Alert with the three credit reporting bureaus (Equifax, Transunion, Experian)
  4. File a local police report – This is standard for all cases of identity theft, and a police report (even if they do not do anything) is recommended by the credit agencies, and federal departments. It is important for your records and recovery down the line when it comes to restoring credit. 
  5. Report identity theft to the FTC at identitytheft.gov
  6. Record keeping – Keep a case file with document information related to the Identity Theft case so that you have the ability to provide financial institutions and others that you took steps to address the fraud.