December 2, 2020

Unemployment Insurance Fraud Update

The Illinois Department of Employment Security has updated its website for reporting suspected unemployment insurance fraud. See IDES FRAUD & IDENTITY THEFT WEBSITE.

Background:  Unemployment insurance agencies around the country, including the Illinois Department of Insurance, have received unprecedented complaints of fraudulent unemployment insurance claims. The ICPAS Government Relations office has received a number of inquiries from CPA members on behalf of their clients and even their own firm regarding suspicious unemployment insurance communications. Those communications have included generic claims notification, verification of employment/unemployment, or receipt of an unactivated debit card.

Even in “normal times” unemployment insurance state agencies have to deal with improper payments or suspected fraud. The pandemic and accompanying federal relief programs have overwhelmed unemployment insurance state agencies due to pressure and deadlines to process claims and get money out the door.

The Pandemic Unemployment Assistance (PUA) that allows those gig workers who are not traditionally eligible for unemployment insurance benefits are now eligible for the first time. This new benefit option disrupted established quality control mechanisms leaving the process vulnerable to fraud.

Essentially, fraudsters troll the dark web for personal information and use that information to file for unemployment claims under this new line of benefits. Like all sectors of the economy, state and federal government agencies have adapted existing processes to address the effects of the pandemic—widespread unemployment insurance fraud being one of them.

ICPAS TAKEWAYS:  Use the IDES website to report suspected fraud. Keep records of your actions to document your reporting.

• Understand that this is a nationwide issue that fraudsters are manipulating during these imperfect times.
• Be patient and understand that established process have been overwhelmed.
• Use the website to report suspected fraud. Our tendencies to want to talk with someone on the phone to immediately resolve are not conducive to the new abnormal.
• Reporting suspected fraud using the website and phone messages on the IDES website will slow down resolution and add stress to an already overwhelmed system.
• We live in imperfect times—be patient.

The Illinois CPA Society Government Relations office will continue working with the IDES General Counsel’s Office and will keep you informed of updates and additional guidance.