More than 250,000 Ohioans reported having their identity stolen and used in a fraudulent unemployment claim since mid-January, according to the Ohio Department of Job and Family Services.
Nearly 70,000 learned they’d been victimized only after JFS mailed them a 1099-G tax form — the form to report government payments, like unemployment — ahead of the 2021 tax filing season, though they’d never filed for or received unemployment.
More than 13,500 employers statewide also have uploaded nearly 50,000 records for employees who’ve fallen victim to unemployment fraud schemes.
Last year, JFS found more than 6,300 fraudulent overpayments from the state’s traditional unemployment program, totaling $6.6 million.
Fraud is exponentially more rampant under the federal government’s Pandemic Unemployment Assistance program, created for self-employed workers and independent contractors, through which JFS identified more than 116,000 fraudulent overpayments totaling $222.7 million.
By November, the PUA program had been defrauded by at least $36 billion nationwide, CNBC reported in early January.
“Ohio, like most states, had no system in place for administering this program and had to build it from scratch in alignment with the new federal guidelines. In designing the system, the federal government opted for looser requirements in favor of rapidly distributing funds, and while that decision is understandable, it compounded the fraud issue,” reads a letter Gov. Mike DeWine sent this month to President Joe Biden, urging a coordinated national response to the ongoing unemployment fraud crisis.
“With the benefit of several months of experience, we’ve now learned that in making it easy for people to apply for and receive benefits, the federal rules also made it easy for criminals to steal citizens’ information off the dark web and use it to scam the system. Based on our understanding, this criminal enterprise is commonly being run out of Russia, China and Nigeria.”
What should you do?
If you think someone’s used your identity to file a fraudulent unemployment claim, here’s what you should do:
Visit unemployment.ohio.gov and click on the second red button “Report Identity Theft — Individuals” and fill out the provided form. The government may issue you a corrected 1099-G form.
You should also file a report with the U.S. Department of Justice’s disaster fraud division, which helps law enforcement curb future identity theft.
If you haven’t yet filed your taxes, you should follow Internal Revenue Service guidance when filing (more on that below).
Take steps to protect your identity, like changing online passwords, or protect your credit score. You can call any one of the three nationwide credit reporting bureaus and place a one-year fraud alert on your credit reports:
Employers can also call the JFS benefit payment control hotline at 1-800-686-1555 during business hours and select option 1 to report identity fraud.
After claims are flagged for review, they undergo a multi-step process to determine whether they’re fraudulent, which can take “some time to reach final fraud determination,” said JFS spokesperson Thomas Betti.
In rare cases, Ohioans who’ve had to file legal unemployment claims have found a fraudster’s already claimed them, he told Mahoning Matters Tuesday. Those cases require personalized review by a specialist, who can close the suspicious claim and open a new one, which can take multiple weeks.
The first, most important step is filling out the JFS unemployment fraud form above, Betti said.
“In normal times, obviously, the processing times would be a lot quicker,” he said. “We’re dealing with millions of claims. On top of that, we’re dealing with a whole bunch of fraudulent claims that are clogging up our system.”
DeWine announced last week JFS is partnering with Google to tackle the fraudulent claim review process. Google is expected to use data analytics services to check all outstanding claims for markers and patterns of fraud, so human workers can get to legitimate unemployment claims much quicker, Betti said.
Haven’t filed your taxes yet? Read this first.
Ohio’s 2020 tax filing deadline has been extended to May 17, mirroring the new, extended federal filing deadline.
If you haven’t yet filed your 2020 taxes and have gotten a 1099-G form you think is fraudulent, that’ll affect how you file.
You might also have received some other kind of mail from a government agency about unemployment claims or benefits, according to the IRS. Often, claims are paid out via debit cards. The mailings could come from any state, not just Ohio.
The government may have also requested information from your employer on a claim made in your name.
Here’s some guidance from the IRS’ website:
When filing your taxes, it’s important you only report the income you actually received, even if your state hasn’t sent a corrected 1099-G form. Don’t report the incorrect income from a 1099-G form believed to be related to fraud.
Taxpayers aren’t required to file an Identity Theft Affidavit, known as Form 14039. You should only file that form if your 2020 tax return was rejected because the IRS has already received a return with your Social Security number on it, or if the IRS tells you to.
Investigation into an identity theft claim shouldn’t delay the processing of your tax returns.
The recently enacted American Rescue Plan allows individuals and couples who earned less than $150,000 in 2020 a one-time exemption for unemployment benefits totaling $10,200 per person. If you’ve already filed your 2020 taxes, don’t file an amended return. Instead, wait for later instructions from the IRS.
If you’re a victim of an unemployment fraud identity theft scheme, you should consider creating a PIN number with the IRS, which can stop fraudsters from filing a tax return under your name.