How to avoid committing unemployment fraud
How to Avoid an Unemployment Scam
The processes of looking for a job, transitioning between jobs, filing for unemployment, and hiring new employees all create many opportunities for Internet scammers to rip people off. Fortunately, though, with a few simple steps you can learn how to avoid these potentially disastrous situations and protect yourself against unemployment scams.
Understanding Common Unemployment Scams
Learn about payment transfer scams.In these scams, the scam artist poses as an employer, gains the trust of the person being scammed, and then obtains access to their bank account by either:
- Asking for bank account information in order to make direct deposit payments.
- “Hiring” the person being scammed to deposit checks for them and then wire them the cash.
- The problem with this scam is that the original check provided by the “employer” is a fake one, and by the time the banks figure it out the person being scammed has already withdrawn and sent the cash, and so becomes responsible for paying back the bank while the fake employer gets away with the money.
Watch out for scams disguised as job invitations.In some cases, a scam artist might send an email to you posing as an employer who found your resume online and who has a potential employment opportunity for you.
- They’ll typically invite you to complete a fake online job application that asks for sensitive personal or financial information.
- They can then use this information to access your bank accounts or other personal accounts in order to get money from you.
Beware scams that ask for personal ID verification.There are a huge number of scams that focus on convincing people that they need to provide some sort of sensitive personal information such as a driver’s license number, a PIN, passport information, bank account numbers, credit or debit card numbers, or social security numbers.
- These scams will usually try to convince you that you need to provide this information in order to move forward with a job application or to access some service that you think you’re purchasing.
- Most legitimate businesses and employers will not ask for this type of information, and if they do, they’ll do it in a secure, documented, and traceable way.
Understand unemployment benefit scams.There are a number of websites that offer to help you file for unemployment benefits in exchange for a small service fee.
- These sites are scams designed to take not only the money you pay them as a fee, but also to obtain important personal data such as your name, address, phone number, email, and other sensitive information that can then be used to access your bank accounts or other sources of funding.
- Always remember that the only way to file for unemployment benefits is directly through official government paperwork or websites. Never trust anything or anyone that offers to file on your behalf or by using something other than state-issued forms or government websites.
Beware scams that offer overseas job opportunities.Working overseas is an appealing idea to many people, especially those who have recently lost a job or who are looking to make significant career changes.
- Many scam artists will leverage this appeal to convince people to fill out fake job applications or to send them personal or financial information that can then be used to gain access to people’s bank accounts or other personal accounts.
Watch out for scams posing as the government.A common approach used by many scam artists is to send emails posing as the government.
- These emails typically tell people that they need to fill out a form or provide the state with some sort of personal information that can then be used by the scam artist to access people’s accounts.
Looking for Red Flags
Beware requests for personal information.If an email or website asks for sensitive personal information, there’s a good chance it may be a scam. In particular, watch out for messages and sites that ask for the following:
- Security codes
- Debit or credit card details
- Bank account numbers
- Social security number
- Driver’s license or passport numbers
- Your mother’s maiden name
- Date of birth
- Your full name and contact information
Look for suspicious language.Many scam emails and websites will use the same types of words, phrases, and terminology. You should be suspicious of emails and websites that use the following:
- Consistently poor grammar and incorrect spelling
- Frequent misuse of words or idiomatic expressions
- The phrase “unemployment filing assistance”
- The phrase “file for unemployment extensions here”
- The phrase “click for filing for unemployment online”
Watch out for fake forms and fees.Filing for unemployment benefits is free, can only be done by the person seeking the benefits, and can only be completed on an official government website or with state-issued paperwork.
- Anything or anyone that charges a fee for filing on your behalf or that asks you to fill out non-government online forms is most likely a scam and should be avoided.
Check a website’s top level domain.Remember that the only way to file digitally for unemployment benefits is on an official government website.
- This means that if a website claims that it will either file for you or that it has the forms you need to file, but it doesn’t end in the .gov extension, it’s likely a scam.
- In particular, watch out for websites making these types of claims that end in the following extensions:
Protecting Yourself If You’re an Employer
Report changes in personnel quickly.When you let an employee go, it’s important that you file this change with your state’s Division of Unemployment Insurance quickly and accurately.
- This will minimize the risk of anything going wrong if the former employee files for unemployment benefits.
Report new hires and rehires.Any time you hire or rehire an employee, it’s important to complete all necessary paperwork in your state.
- This will help minimize the chance of paying unemployment benefits to a person who’s actually ineligible to receive them.
Attend appeal hearings.If you appeal a determination to award unemployment benefits to a former employee, you must participate in the hearing.
- If you file an appeal but fail to appear in court, benefits will be awarded to the employee.
File taxes quickly and accurately.Failure to file and pay all wage reports and taxes may end up increasing your federal unemployment insurance liability.
- To avoid this, and to ensure that a former employee’s eligibility for benefits are processed properly, be sure you file and pay your taxes quickly and accurately.
Avoiding Scams When Seeking Unemployment Benefits
Read the relevant information.The most important, yet most frequently overlooked element in the unemployment process is reading the information guide provided by your state’s unemployment insurance agency.
- If you haven’t received this information in the mail, contact the nearest unemployment insurance agency office.
Be honest.Anytime you file a report with the unemployment insurance agency, be sure to be as accurate and honest as possible.
- Doing so will help your claim avoid looking suspicious and will speed the time it takes for your claim to be processed and approved.
Keep good records.It’s a good idea to keep detailed and consistent records of all your interactions with former employers and the unemployment insurance agency. This way, if there’s ever any discrepancy or controversy surrounding your claim to unemployment benefits, you can set the record straight. When maintaining records, be sure to note the following:
- The names of people you talked with from the unemployment agency or at your former employer.
- The dates on which interactions occurred, and the content of these interactions.
- Note the channel of communication (i.e., telephone, email, letter, etc.).
- Keep copies of all relevant written correspondence, whether hardcopy or digital.
Use the correct filing methods.Always remember that there is currently no way to file for unemployment benefits other than to do it for yourself using official government forms, paperwork, and websites.
- Anything outside these channels is most likely a scam and should be avoided.
Playing it Safe While Seeking a Job
Do your research.Anytime you begin interacting with a potential employer, spend some time researching them to figure out whether or not they’re legitimate. Here are some good ways to conduct this research:
- Run a Google search on the potential employer’s name or company name to see if anyone has had any problems with them.
- Ask about their track record through your state’s Attorney General’s office.
- Search for the employer on the Better Business Bureau’s website to see if anyone has registered complaints about them.
Protect your identity.You should avoid giving out any sensitive personal or financial information online or over the phone, especially if you’re asked to do so as part of a job application process.
- In most cases, legitimate employers will not ask you to do this.
Avoid upfront payments and fees.Avoid any potential employer that asks you to pay an application fee, that requires you to pay for a training course before you’re offered an actual job, or that promises you commissions in exchange for transferring money for them through your bank account.
- Each of these scenarios is likely a scam designed to steal your money.
Watch out for pyramid schemes.Pyramid schemes will ask you to join a company or pay money into a company in exchange for the chance to make more money when new participants join or pay into the program in the future.
- These schemes are often scams, so play it safe by steering clear of them altogether.
Demand a contract.If a potential employer does not provide a contract to finalize an employment agreement, it may be a scam.
Look for official job postings.If you’ve received an email about a possible job opportunity that you didn’t previously know about or apply for, it may be a good idea to do some online research to see whether or not the company has issued a legitimate job posting.
- This can help determine the validity of the job offer.
Reporting Unemployment Scams
File a report with the Internet Crime Complaint Center.The Internet Crime Complaint Center, also known as IC3, is a special agency set up by the FBI, the Bureau of Justice Assistance (BJA), and the National White Collar Crime Center (NW3C) to investigate fraudulent online activities, including emails and websites. When filing a complaint on the IC3’s website, be prepared to provide the following:
- A detailed report of the scam and your experience with it.
- Your name and some basic contact information.
- The name of the fraudulent party and any relevant contact information you may have.
Report the scam to the Better Business Bureau.You can visit the BBB’s Scam Stopper website to file a complaint about a particular company or employer, and to check for any other similar complaints.
Inform Google of fraudulent websites.
Video: South Dakota Unemployment Insurance Fraud Prevention
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