Unemployment Fraud 😠

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Unemployment Fraud

During the pandemic, unemployment benefits kept many Americans afloat as businesses closed and employees were laid off. States were unprepared for the sudden surge of jobless claims they had to face when the pandemic struck. They probably knew fraud was bound to happen, but they felt that getting the money to struggling individuals was more crucial than painstakingly verifying that each claim was legitimate. Fast forward to today, and some experts believe half of the unemployment money from the pandemic was stolen.

Unemployment claims were uncommon before the pandemic, and they tended to last for such brief periods of time that foreign crime gangs didn’t see them as a viable target. Now that jobless claims are in the millions, scammers aren’t playing around.

According to some estimates, unemployment fraud during the pandemic may approach $400 billion, with most of the money probably ending up in the hands of foreign crime syndicates, making this more than simply theft but a national security issue. But how did scammers manage to steal millions of dollars from the government?

Scammers often illegally obtain personal information and use it to impersonate those who filed for unemployment benefits. Sometimes they use deception to get people to give up their personal information freely — a process known as social engineering. Additionally, scammers can buy personal information from the dark web using cryptocurrencies.

Many states are starting to learn how to combat unemployment fraud, making their systems more sophisticated. However, states are about $400 billion too late. 

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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