When people think of identity theft, fraudulent credit activity and impersonation come to mind. But unsecure personal information can also be used to file for unemployment benefits without the person’s knowledge, according to Cisco Gamez, media and public relations specialist with Texas Workforce Commission.
Of the 652,800 claims filed in 2019, the workforce commission determined 1,142 were suspicious — a ratio of about 0.18%, Gamez said. However, there was huge increase last year as the coronavirus pandemic sent unemployment claims skyrocketing.
The total number of unemployment claims in 2020 was up to approximately 4.1 million, with 234,268 suspicious claims — bringing the ratio up to 6.82%.
“The significant increase in suspicious claims is due to identity theft,” Gamez said. “The perpetrators use identity information they stole from somewhere else before they file the claim with TWC. This means, the information is real, but the claim is not.”
Taxpayers who receive an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits, according to the IRS website.
Once Texas Workforce Commission, or TWC, has confirmed an individual’s identity has been stolen and received a 1099-G form in connection with a fraudulent claim, TWC can provide a letter to the customer that can be shared with the IRS, Gamez said.
“Taxpayers who are unable to obtain a timely, corrected form from states should still file an accurate tax return, reporting only the income they received,” the website continued. “A corrected Form 1099-G showing zero unemployment benefits in cases of identity theft will help taxpayers avoid being hit with an unexpected federal tax bill for unreported income.”
The TWC reviews each unemployment insurance claim to confirm identity and investigate the claim to confirm benefits or lock down the account and stop payments.
“Texans and employers who respond quickly to TWC notices can help TWC identify fraudulent claims faster and lock the accounts before payments go out,” Gamez said. “If TWC has confirmed that an individual’s identity has been stolen in connection with a fraudulent claim, the individual will not be responsible for the fraudulently obtained benefits.”
Fraudulent activity can be reported directly to the TWC by phone at 1-800-252-3642 or on their website, where the information is available in both English and Spanish: https://www.twc.texas.gov/UI-ID-theft.
If a victim of ID theft receives an overpayment notification, Gamez said they should reach out to TWC’s identity theft unit at IDTTF@twc.state.tx.us. None of the individual’s benefits are affected if a fraudulent claim was made by identity theft.
“Individuals who report suspected fraud to TWC do not always receive a call, email, or letter in response to the information provided,” Gamez clarified, “TWC will only contact the complainant if we need clarification regarding the information provided.”
Not only are the accounts shut down, TWC works with local and federal agencies, along with district attorney offices, to prosecute those who try to cheat the system. Anyone can view an active list of those criminal prosecutions on the TWC website at: https://www.twc.texas.gov/criminal-prosecutions-unemployment-insurance-fraud.
Victims of identity theft should contact local law enforcement for a full investigation, Gamez said. Additionally, the Federal Trade Commission has a checklist of further actions on their website. A freeze can be placed through a credit report agency to secure financial information, and a free credit report can be obtained to rule out fraudulent activity, Gamez said. Individuals should also contact their bank and credit account facilitators to address compromises to personal information, he said.
The credit report agencies that can be contacted include:
- Equifax: 800-349-9960
- Experian 888-397-3742
- TransUnion 888-909-8872
To report unemployment fraud, go to:
- TWC Fraud Hotline 800-252-3642
- TWC Fraud email: TWC.fraud@TWC.state.tx.us