There have been reports of unemployment fraud over the past few years, but it has become even become more prevalent during the COVID-19 pandemic and subsequent financial crisis.
The Michigan Unemployment Insurance Agency is reporting a recent increase in these activities, with some criminals posing as self-employed workers or independent contractors to illegally obtain unemployment benefits.
National alert issued due to impacted state programs
“The U.S. Secret Service recently issued a national alert regarding an international criminal ring exploiting the COVID-19 crisis to commit large-scale fraud against state unemployment programs,” the state UIA tells employers.
Because of this, the Michigan UIA has increased identity requirements in order to authenticate claim eligibility.
Some existing unemployment claimants may receive “Stop Payment” notices on accounts with instructions on submitting verification information. Financial institutions may place a hold on accounts if they perceive suspicious activity. Customers should contact their institution directly if this occurs.
Unemployment insurance fraud increases unemployment taxes for businesses. It threatens the availability of funds for people with legitimate unemployment claims and burdens the state's unemployment trust fund.
How does unemployment fraud happen?
Unemployment fraud occurs when a perpetrator uses an individual's personally identifiable information to file for unemployment benefits on the Unemployment Insurance Agency’s website. Some criminals attack the UIA because the agency typically tries to get people benefits as soon as possible.
If this happens to an employee, the UIA advises that they:
- Contact the Unemployment Insurance Agency immediately to report the fraud. Report fraud online at Michigan.gov/uia through the Report Fraud or Report Identity Theft link or call the UIA Fraud hotline at 1855-UI-CRIME.
- Complete UIA Form 6349 Statement of Identity Theft and submit the form either in person at a Problem Resolution Office (PRO), by mail at Unemployment Insurance, PO Box 169, Grand Rapids MI 49501, or by fax at 517-656-0427.
- Place a free fraud alert on your credit record at the three credit reporting agencies and get a copy of your credit reports. A fraud alert will make it harder for someone to open new accounts in your name. (You need only to contact one of the three credit bureaus listed below; that credit reporting agency is required by law to tell the other two.)
- The credit reporting agencies and their websites are:
If you suspect a claim has been filed fraudulently in your name, please contact BCN Services for additional resources and assistance.
What can employers do?
Check the monetary determination you receive and respond to any fact-finding requests you receive. If you notice inaccurate information, notify the UIA. Protesting the monetary determination (Form 1575E) timely in these occurrences may be the best way to stop a fraudulent claim from being paid.
Report suspected fraud or identity theft online at Michigan.gov/uia by clicking on the Report Fraud or Report Identity Theft link or call 1-866-500-0017.
Find more information in Fact Sheet 167, "Protecting Your Business and Your Employees from Identity Theft) online at Michigan.gov/uia. Information for employees is also available in Fact Sheet 166, “Protecting Yourself from Identity Theft.”
A special note to employers from the UIA
The Michigan UIA is experiencing unprecedented high call volumes and it may be difficult for employers to reach the Office of Employer Ombudsman. An alternate way for employers to contact UIA is to send a Web Notice via your MiWAM account.
Additionally, if you have questions about the Michigan UIA Work Share program, email UIA-WorkShare@michigan.gov. If you have time-sensitive information regarding an employer bankruptcy, email email@example.com and allow 48-72 hours for a response.
-Lisandra Garrow, Partnership Manager