Another Unemployment Fraud Wave Hits Several States

Multiple states appear to be getting pounded by unemployment fraud claims.

At least two states (Ohio and Connecticut) , and possibly a third (Colorado) have reported a flood of new fraudulent claims.

What is this, Wave #5 of Covid Fraud?

Connecticut – 75% of Unemployment Applications Are Fraud

The state Department of Labor in Connecticut put out a warning last week about a surge in fraud cases, which it attributes to a rise in identity theft. The department said that criminals are “flooding” the system with stolen identities that can be bought for $1 online.

According to officials, they are receiving several thousand claims a day, and that 75% of those claims are outright fraud.

The claims are unique because victims are receiving official-looking letters from the Department of Labor. Those letters are designed to phish additional information from the victims so they can further perpetuate identity theft against them.

Ohio – There are Reports of A Significant Uptick in Scams and Account Takeover

And Connecticut isn’t the only state that is reeling from high rates of unemployment fraud – there are reports of high levels of fraud in Ohio as well. But the problem isn’t application fraud, but account takeover.

It appears that scammers are trying to hack into people’s accounts.

Last week the state reported that significant lag times in processing unemployment fraud claims is due to scammers flooding the system. Apparently 28,000 accounts for residents of the state were hacked by scammers and they paid out over $180,000 to fraudsters.

The state reported that, “Over the past two weeks, Ohio experienced an increased number of attempts to fraudulently access its unemployment system. We have identified and addressed the issue, which involves criminals accessing an individual’s account using fake credentials”

As part of their anti-fraud measures, impacted individuals they notified individuals of suspicious activity in their account, and their accounts were locked down.

Colorado – 33% Of Unemployment Claims Are Fraud

And Colorado was recently the target of unemployment fraudsters as well.

The Colorado Department of Labor and Employment released a statement that, “they were experiencing an uptick in fraudulent attempts to gain access to Unemployment Insurance benefits,” the alert states. “Fraudsters are attempting to hijack existing claims and file new fraudulent claims for people not already in the system.”

And 3 weeks ago, the state reported that 1 in 3 claims they receive are fraud. They recently introduced new measures to validate identities and that is when they discovered just how many of their claims were actually fraud.

COVID Fraud Just Won’t Go Away

Covid is over but the Covid fraud hangover just doesn’t seem to go away. We may be fighting these higher levels of fraud against state agencies for many, many years.