States Report Spike in Fraudulent Unemployment Claims

Several credit unions in Washington have been affected by the widespread scam.

5/26/2020

Credit unions all over the country are reporting increases in unemployment insurance fraud cases, wherein victims’ identities are being used to file false unemployment claims.

The U.S. Secret Service says it has uncovered a well-organized scam exploiting the COVID-19 crisis to commit large-scale fraud against state unemployment insurance programs.

So far, the primary state targeted is Washington, but the federal law enforcement agency warns that “it is extremely likely every state is vulnerable to this scheme and will be targeted if they have not been already.”

In Washington, individuals residing out-of-state are receiving multiple ACH deposits from the State of Washington Unemployment Benefit Program, all in different names with no connection to the account holder.

The Washington State Employment Security Department is responding in a number of ways, such as placing a one- to two-day hold on all benefit payments to ensure authenticity, expanding its fraud investigation team, and requiring authentication from customers filing claims.

Credit unions that are receiving suspicious direct deposits into an account via ACH should follow normal fraud reporting procedures. Additionally, the Seattle Police Department’s cyber-crime investigators have recommended several steps to anyone who believes they are a victim of unemployment fraud. Credit unions may wish to share this information with their members who may be potential victims.

For questions, please contact David Curtis, Director of Compliances Services.