Unemployment Insurance: Reporting Fraud in California

Unemployment insurance is provided to unemployed individuals that meet specific eligibility requirements set forth by the state in which they live. In the state of California, unemployment insurance is available to individuals who meet the monetary requirement of working and earning a certain number of wages within the previous 18 months before filing. They must also be unemployed through no fault of their own, be available and able to work, be willing to accept suitable work offered, and be actively seeking employment to qualify. Once an individual is approved for unemployment benefits, they must recertify each week to continue receiving weekly benefits.

Since the pandemic began and many people lost their jobs, there has been an unprecedented increase in unemployment insurance claims. This has led to a rise in unemployment fraud and identity theft linked to unemployment claims. In response, the U.S. Department of Labor recently provided $100 million in total to states to combat unemployment fraud. The Department’s Employment and Training Administration also issued an unemployment insurance letter that highlights strategies and tools to help states strengthen anti-fraud strategies and confirm the identity of those filing for unemployment. 

UNDERSTANDING UNEMPLOYMENT FRAUD

When individuals collect unemployment insurance benefits due to unreported, false, or misrepresented information, they are committing unemployment fraud. When filing a claim or recertifying for weekly benefits, they are responsible for reporting accurate information and abiding by the legal requirements set forth by the state they reside in. Individuals who commit unemployment fraud could face serious fines and penalties.

PENALTIES FOR COMMITTING UNEMPLOYMENT FRAUD

There are several serious penalties for committing unemployment fraud. These penalties include:

• Possible jail time.
• Prosecution in court by government authorities.
• Ineligibility to collect unemployment benefits in the future.
• Loss of future income tax refunds.
• Requirement to repay the unemployment benefits received with fines and penalties added.

TYPES OF UNEMPLOYMENT FRAUD

There are many ways one might commit unemployment fraud. Some examples include:

• Providing false information when applying for unemployment benefits or recertifying for benefits.
• Withholding information when applying or recertifying for unemployment benefits.
• Not reporting wages from any source for the week the work was performed.
• Returning to work but continuing to recertify for unemployment benefits without reporting work and earned wages.
• Working a part-time or temporary job and not reporting the earnings, causing you to collect more than you are allowed.
• Cashing or accepting unemployment benefits when you did not apply for benefits.
• Quitting a job to claim Pandemic Unemployment Assistance (PUA) provided due to the pandemic.

PANDEMIC UNEMPLOYMENT ASSISTANCE (PUA) FRAUD

Criminals have attempted to take advantage of the coronavirus pandemic to receive unearned money through identity theft. For example, scammers have tried to use personal information from various sources to apply for Pandemic Unemployment Assistance (PUA). PUA is provided as an additional means of income to support those whose employment was impacted by the pandemic.

In some instances, checks for PUA were mailed or deposits made into bank accounts. The criminal benefits from the individual whose identity was stolen. The individual needs to report the fraud to the unemployment agency immediately and follow the steps for identity theft and unemployment fraud outlined in the next section.

If individuals cash or spend the unemployment money they fraudulently received, it’s a form of unemployment fraud. Anyone who receives PUA benefits that did not apply for them either needs to return the check to their state unemployment agency or write a check for the direct deposit amount.

IDENTITY THEFT & UNEMPLOYMENT FRAUD

In addition to PUA fraud, the pandemic has also prompted criminals to commit general unemployment fraud and other types of scams that result in identity theft. Regarding unemployment benefits, individuals often don’t learn about the fraud until they receive a notice about their unemployment benefits from their state unemployment agency. When this occurs, it means someone unlawfully has access to your personal information, including your Social Security number, date of birth, address, and so on. It is essential to act quickly with the following steps:

• Report the fraud to your state unemployment insurance benefits agency.
• Report the fraud to your employer, if relevant.
• Report the fraud to the FTC at gov, and utilize the resources provided, including credit monitoring, fraud alerts, and ways to freeze accounts to make it more difficult for new accounts to be opened fraudulently in your name.
• Frequently review your credit reports for fraudulent information or accounts through a credit report site like com. 



REPORTING UNEMPLOYMENT FRAUD IN CALIFORNIA

If you unknowingly committed unemployment fraud or believe someone else is committing identity theft to commit unemployment fraud, you need to report it immediately. Reporting unemployment fraud in California can be done by phone, online, or by mail.

The fastest means of asking a question about unemployment insurance is through UI Online. For reporting unemployment fraud, you can use the State of California Ask EDD portal and select “Report Fraud” from the dropdown.

By phone, individuals can contact the Employment Development Department (EDD) about unemployment insurance and fraud at 1.800.300.5616. For a full list of contact numbers, refer to the State of California EDD UI Phone Directory. 

By mail, individuals can complete the “Comments, Suggestions, and/or Complaints” form that can be downloaded from the State of California EDD website. The address to mail the form can also be located on the EDD contact page.

UNEMPLOYMENT INSURANCE IS AVAILABLE FOR THOSE WHO NEED IT

Unemployment insurance is a critical resource for those who need it. However, some people unintentionally commit unemployment fraud, while others abuse the system to commit unemployment insurance fraud. No matter the reason, committing unemployment fraud can lead to serious penalties and consequences.

If an employee discovers they are a victim of unemployment fraud (even if they did it by mistake) or identity theft, they must report it immediately to their state unemployment agency. 

SECURE UNEMPLOYMENT INSURANCE COVERAGE TODAY WITH KBI BENEFITS

KBI Benefits has you covered. We work with numerous insurance companies to help you secure the most comprehensive policies available at the most affordable price to meet your needs. We will partner with you to determine your risks, identify gaps in coverage, and secure the best plans for you now and in the future.

Contact us today by submitting our online contact form or calling us at 408.366.8880. We look forward to working with you!