Before 2020, the record for most fraudulent unemployment claims filed in a year in Kansas was seven. That record has been shattered. This year the Kansas Department of Labor (KDOL) has already uncovered more than 45,000 fraudulent unemployment claims. And we still have three months to go!
The scheme primarily targeted expanded unemployment programs created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in the wake of the COVID-19 pandemic. The CARES Act expanded unemployment benefits to people traditionally unable to qualify, such as the self-employed and independent contractors. The fraudulent scheme has caused significant payment delays to Kansas families.
Fraudsters used victims’ personal information to file for unemployment benefits. According to the U.S. Department of Justice, most victims had their information exposed in a mass data breach. Other victims were victims of prior identity theft. Many victims did not learn of the fraud until the KDOL denied their claims as duplicative. The KDOL also discovered fraudulent claims after employers confronted employees for filing an unemployment claim while still being employed.
Kansas isn’t unique in this regard, as a nationwide investigation uncovered similar attacks in other states. The U.S. Department of Labor estimates fraudsters have filed $8 billion in fraudulent unemployment claims so far this year in the United States.
It is important that employers pay attention to each unemployment claim to curb additional fraud. Employers can report suspected unemployment fraud at www.reportfraud.ks.gov.