Fraudsters Could Have Stolen Almost Half of COVID-19 Benefits, Report Says

Fraudsters Could Have Stolen Almost Half of COVID-19 Benefits, Report Says

(RepublicanPress.org) – The nation faces a host of problems as it attempts to return to normal after more than a year of restrictions resulting from the COVID-19 pandemic. Congress passed multiple economic relief packages to assist Americans unable to work and otherwise financially challenged by the coronavirus outbreak. But, not all of that aid made it to those who needed it.

On June 9, Axios reported that fraudsters might have walked away with “as much as half” of the unemployment benefits distributed by the states. Making matters worse, many of those funds likely ended up in the hands of foreign criminal organizations, meaning this problem is more than a matter of domestic theft. According to Axios, it also crosses over into the realm of national security.

The various states and federal government agencies knew all along that criminal conduct was an eventuality. With a financial relief effort of that magnitude, losses were inevitable. However, a key issue was the inability of the states to efficiently keep up with and properly administer the massive volume of unemployment claims. Additionally, many state-level unemployment offices face staffing shortages in the wake of the pandemic.

Experts Weigh In on the Theft

In terms of dollars and cents, ID.me, a fraud prevention services company, said the total amount of lost unemployment benefits to criminal activity could total $400 billion or more. LexisNexis Risk Solutions echoed that concern. Its CEO told Axios that at a minimum, it estimates 70% of the stolen money fell into foreign hands. That means unemployment funds won’t end up circulating in the economy as intended, which could lead to more economic fallout as the nation tries to stabilize.

How the Theft Occurred

In simple terms, fraudsters pulled off the theft by stealing the identity of individuals eligible to receive unemployment benefits. Criminals and hackers managed to get their hands on personal information and filed claims on behalf of other individuals.

The usual online scams were used — phishing scams and the like. Cybercriminals trick people into handing over sensitive information using fake emails. They also use social media accounts to discover people’s birth dates and place of birth, high school and hometown information, work history, and other information necessary to file bogus claims.

With increased awareness comes increased defense mechanisms, and Axios also reported that many states have stepped up to meet the challenge of combating unemployment fraud. Unfortunately, those efforts are too little and far too late for many states and unemployed workers.

You can go to the FBI website for information regarding protecting yourself from identity theft.

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