Employers are discovering fraudulent unemployment claims through Connecticut’s new unemployment benefits system, ReEmployCT, which launched earlier this month, according to the Connecticut Business & Industry Association.
More than 50% of unemployment claims that a third-party unemployment compensation service provider, Unemployment Tax Management Corp., received on behalf of clients through ReEmployCT since July 24 were fraudulent, according to CBIA.
Officials with the Department of Labor say the new unemployment system is working as it should.
An employer automatically receives a notification when a person submits a claim from a former employee. However, when an identity thief obtains a person’s information, they may attempt to use it to file a fraudulent claim – sometimes for an employee who still works for the company.
A spokeswoman for the DOL, Juliet Manalan, said ReEmployCT is designed to detect fraudulent claims. The process starts with a notification being sent to the employer, which is among the first lines of defense against imposter claims.
The system is not causing fraud; it is working to prevent fraud, she said.
An employee whose information has been submitted to ReEmployCT by a third-party is likely a victim of identity theft and should take steps to protect themselves, such as changing their passwords on websites, Manalan said.
Employers should follow the instructions on Form 21A and respond to the DOL.
“They should do what they’ve always done, which is to respond to those notices and tell us if the application is a bad application,” Manalan said.
Rich Siegel, president of Wakefield, Massachusetts-based Unemployment Tax Management Corp., said he discovered the apparent fraud while reviewing claims he received on behalf of his clients. He reported it to the DOL.
In one case, a Connecticut manufacturer received two claims that appeared to be filed by current employees, according to CBIA. The employees said they filed claims for unemployment previously, but had not claimed unemployment during the month of July.
Manahan said imposters using stolen information to file claims often purchase user data harvested by cybercriminals on the dark web. It could take years between the time that a security breach occurred and the time someone attempts to use the data to commit fraud, she said.
The unemployment insurance system is just one of the ways that cybercriminals use stolen personal information. They may also try to open credit cards in the victim’s name, among other things.
Siegel urges employers to confirm with any current employee that they have not filed for unemployment. He said employers should quickly respond to the DOL’s claim request if the employee has not filed, by indicating that the claim is potential fraud.
For more information about the ReEmployCT system, or to report fraud, visit reemployct.com.
