Unemployment Scam Alert: COVID-19 Edition

The FTC recently issued an unemployment scam alert regarding fraudulent claims. Here's what you should know and how to protect your company.



The COVID-19 pandemic has brought a lot of “firsts” with it, including an unprecedented number of unemployment claims. With that high volume of claims comes a scammer’s opportunity to take advantage of missed details and safety protocols, which triggered the DOL’s recent fraud alert.

To help protect your company and staff, we’ve identified how these scams occur and outlined basic safety measures to prevent them.

How Unemployment Scams Happen

Unemployment-related scams can happen to a current or former employee—regardless of an employee’s role at an organization. While scams happened before the COVID-19 pandemic, recent unemployment scams have primarily fallen under the following categories:

  • Fraudulent unemployment benefit claims: false claims filed using the personal information of an employee or former employee. This allows a scammer to receive someone else’s falsified unemployment benefits.
  • Phishing attempts: emails sent with the intent of tricking people into giving away personal information. This may allow scammers to:
    • File fraudulent unemployment claims.
    • Change bank account information on legitimate unemployment claims.
    • Steal additional personal information.

To help protect your company and its employees, here are several steps to identify and prevent fraudulent activity.

How to Identify & Prevent Scams

  • Hover on and review links, but don’t click—By putting the cursor over a link, you’ll be able to see the URL without clicking it. Always verify links in an email before clicking.
  • Know that state workforce agencies do not use secondary accounts—Real government agencies do not ask users to log in to external sites (Google, Microsoft, Apple, Yahoo!) and will only ask for an email address if you are creating a user account on their website.
  • Avoid following emailed directions to log in to a personal account—Scammers oftentimes request personal logins to Google, Microsoft, Apple, Yahoo!, and more to try and get your personal information (account numbers, passwords, files and contacts). They may then send the same scam email to your friends and family. If you want to read messages in any of these personal accounts, open a new window and login to the site directly rather than from an email.

In addition to these safeguards, the Federal Trade Commission (FTC) has issued a guide for small businesses to help you determine the best steps to take for your organization. By educating workforces, reviewing emails with caution, and preparing appropriate scam responses, your company can be better prepared for attempted fraud.

More than ever, employees need to be educated on safety protocols to avoid becoming the next victim of a fraudulent unemployment scam.

When companies partner with Stratus.hr under a PEO relationship, we have the fiduciary duty to handle all unemployment claims, relieving them of this administrative liability and potential risk. For more information or a free demo, please book a consultation.

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