How to Spot and Avoid Unemployment Scams

Over the past few months, millions of people have lost their jobs due to the COVID-19 pandemic. As a result, many Americans are applying for unemployment benefits and are struggling to find work. Sadly, with so many people applying for benefits, unemployment scams are rife and hard to avoid.

In Washington state alone, $300 million was recovered in fraudulent unemployment benefit claims during the COVID-19 pandemic. In Maine, the Department of Labor canceled over 12,000 unemployment benefit claims suspected to be fraudulent.

This guide reveals some of the most common unemployment scams to look out for, how to avoid scams, and what to do if you suspect you've been a victim of a scam.

Common types of unemployment scams

Phishing email scams

One of the most common scams these days are phishing emails. A phishing email is designed to look like an email from a reputable source. For example, you may get an email that looks like it's from your bank or a shopping site. In the case of unemployment scams, it could even look like it's from the U.S. Department of Labor.

Phishing emails typically ask for ID confirmation or will mention something like "Verification Required" in the subject line. For those who have recently applied for unemployment benefits, it's easy to mistake these for genuine emails.

These scam emails usually contain a link for you to click on. Instead of taking you to the real website, you will land on a fake website that looks legitimate. You'll either be asked to update personal information, like a password, or to click on a link that downloads malicious software.

Many phishing emails are easy to spot with obviously fake email addresses or a lot of spelling mistakes. However, many are hard to identify and are designed by sophisticated scammers. Many people will click on links in these emails without thinking. A good rule of thumb is: If you are unsure about an email, don't click on any links. Instead, search for the website yourself or call an official number to confirm its legitimacy.

Fake phone call scams

Another way fraudsters get in contact with people is through fake phone calls or text messages. The message or caller will typically tell you that your benefits have been suspended, and you must reactivate your account. The scammer will then ask for details such as debit card numbers or passwords.

The most important thing to remember is that state unemployment insurance programs will never ask for personal information like this via text or phone. If you're ever unsure about a number, search for the website yourself and call the official number to check.

Jobseeker scams

With so many people applying for work now, scammers have seen an opportunity to prey on them. Scammers pretend to be potential employers and will try to fool people into believing they have a job opportunity. Instead, what they aim to do is to collect personal information about you.

Often these job opportunities will seem too good to be true at first glance. They will sometimes even ask for money upfront as a "processing fee" or ask you to purchase a "starter kit." Fraudsters will typically use well-known and trusted companies to pose as.

For example, a common one at the moment involves emails pretending to be from Costco. They will have something like "Provisional Job Offer" in the email subject line. If you see something suspicious like this, remember not to click on any links.

What to do if you have been scammed

No one ever imagines they will fall for a scam, but scammers are growing more and more sophisticated. If you happen to get scammed, there are a few steps you can take, but you need to act quickly.

If someone has managed to file claims for unemployment benefits in your name, you must report the fraud to your employer and your state unemployment benefits agency. Each state will have different rules and guidelines on how to do this, but you can find information on how to contact the right unemployment benefits agency for your state through the Career One Stop website.

The Federal Trade Commission (FTC) also has a website where you can report identity theft and get help. You can also report suspected employment-related fraud to the Internal Revenue Service (IRS).

The bottom line

Unemployment scams are sadly very common right now, and some can be very easy to fall for. If you do end up becoming a victim of scammers, you can take steps to inform the authorities and get applications canceled or rectified.

The key is to remain vigilant and report any suspicious activity quickly. When it comes to emails, texts, or calls, it's best to be cautious and verify any emails or phone numbers before giving any personal information.

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