Tens of millions of Americans have found themselves out of work as the economy reels from the impact of COVID-19. A record 22 million Americans have filed for unemployment insurance in the four weeks leading up to April 11.

Unfortunately, when there’s bad news, the scammers aren’t far behind. According to the Federal Trade Commission (FTC), Americans have lost a collective $13.4 million to coronavirus-related fraud since the beginning of 2020, and unemployment scams have contributed their fair share to the loss.

The panicked rush to fill out claims, along with the overloaded unemployment websites and phone lines, provide the perfect cover for con artists. In light of the pandemic, the federal government has also waived some regulations of unemployment insurance, including the requirement to actively be seeking work in order to be eligible for benefits. The looser criteria have only made it easier for scammers to pull off their schemes without getting caught.

Here’s all you need to know about the circulating unemployment scams.

How the scams play out

An unemployment scam can involve a con artist filing a claim in someone else’s name and then collecting their benefits or claiming to have been employed by a place of business where they have never held a job. The victim will thus be denied their own benefits.

According to the Inspector General of the U.S. Department of Labor, these cons can also take the form of a scammer impersonating a government employee and offering to help the victim fill out their application form for unemployment insurance. The victim, seeking assistance with their claim, will willingly comply with the scammer who is only out to get information so they can nab the victim’s benefits. Or worse, the scammer may use this information to steal the victim’s identity.

Other times, while allegedly helping the victim fill out their forms, the scammer will ask the victim to make a payment via credit card to enable them to receive their benefits. Of course, this money will go straight into the scammer’s pocket and the victim’s unemployment claim will never be filed.

In yet another variation of the unemployment scam, fraudsters create bogus websites that look like the federal websites used for claiming benefits. Scammers use sophisticated software to create these sites and lure unsuspecting victims via social media posts or emails. Once the victim is on the site, they willingly share information and assume they are actually filling out their unemployment forms.

Unemployment scams can make a challenging situation all the more difficult by leading to theft, delaying an unemployment claim or completely disqualifying a victim from receiving unemployment insurance.

How to spot an unemployment scam

As always, arming yourself with knowledge is the best way to protect yourself against an unemployment scam.

First, it’s important to note that there is no fee involved in filing or qualifying for unemployment insurance.

Second, government officials will never ask you to share personal information over the phone unless a phone appointment was preplanned and scheduled for a specific date and time. This includes a full Social Security number, date of birth, employment history, and financial information.

Finally, sensitive information should never be shared on a site without first verifying its security. Each state will have its own website dedicated to filing and checking unemployment claims, but you can look for the lock icon next to the URL and for the “s” after the “http” in the web address. It’s also best to visit your state’s unemployment site on your own, by typing in the web address yourself, instead of clicking on an ad or a link that’s embedded in an email.

Common Unemployment Questions

Tens of thousands of workers who have lost their jobs during the coronavirus pandemic are now eligible for newly expanded unemployment insurance benefits, including an extra $600 a week that has been added to existing benefits. And those existing benefits have been extended.

In addition, more workers are now eligible for these new jobless benefits, including part-time employees, gig workers, those who are self-employed, freelancers and independent contractors.

What does that mean to you, and how much money will you get? Other than the extra $600 weekly payment, which is scheduled to last through the end of July, it depends on which state you live in, since states can set their own guidelines. One common change across states, however, is that the normal 26-week maximum for regular benefits has been extended for up to
an additional 13 weeks.

So, how do you apply for jobless benefits and when should you do it?

Begin by applying online through the state where you work. To find the application, either do an online search by entering your state’s name along with the word ‘unemployment’, or visit careeronestop.org, which is sponsored by the U.S. Department of Labor. When you find your
state’s application site, be sure to read its requirements and follow them closely so your benefits won’t be delayed.

You should apply as soon as you are no longer working so your application can be processed as quickly as possible, but be aware that states already are struggling to keep up with requests as more and more people seek benefits. To avoid unnecessary delay, you should have the benefit money deposited directly into your financial account, or if you elect to get a check mailed be
sure to use mobile deposit through your financial institution’s mobile banking app.

Some of the most important things to have on hand when you file include:

  • Your Social Security number.
  • Your mailing address.
  • Your driver’s license or state-issued ID.
  • The name, address and phone number of your employer.
  • Your work start and end dates.

Don’t delay. These expanded unemployment benefits can be a lifeline to help you get through this economic crunch.

The following information is from the U.S. Department of Labor.

My regular unemployment compensation benefits do not provide adequate support given the unprecedented economic challenges caused by the COVID-19 outbreak. Can I expect to receive additional relief?

Yes, depending on how your state chooses to implement the CARES Act. The new law creates the Federal Pandemic Unemployment Compensation program (FPUC), which provides an additional $600 per week to individuals who are collecting regular UC (including Unemployment Compensation for Federal Employees (UCFE) and Unemployment Compensation for ExServicemembers (UCX), PEUC, PUA, Extended Benefits (EB), Short Time Compensation (STC), Trade Readjustment Allowances (TRA), Disaster Unemployment Assistance (DUA), and payments under the Self Employment Assistance (SEA) program). This benefit is available for weeks of unemployment beginning after the date on which your state entered into an agreement with the U.S. Department of Labor and ending with weeks of unemployment ending on or before July 31, 2020.

I am about to exhaust my regular unemployment compensation benefits. What kinds of relief does the CARES Act provide for me?

Under the CARES Act states are permitted to extend unemployment benefits by up to 13 weeks under the new Pandemic Emergency Unemployment Compensation (PEUC) program. PEUC benefits are available for weeks of unemployment beginning after your state implements thenew program and ending with weeks of unemployment ending on or before December 31, 2020.

The program covers most individuals who have exhausted all rights to regular unemployment compensation under state or federal law and who are able to work, available for work, and actively seeking work as defined by state law. Importantly, the CARES Act gives states flexibility in determining whether you are “actively seeking work” if you are unable to search for work because of COVID-19, including because of illness, quarantine, or movement restrictions.

In addition, if you have exhausted the 13 weeks of additional benefits available under the PEUC program, you may be eligible to continue receiving benefits under the PUA program. PUA benefits are available for a period of unemployment of up to 39 weeks, meaning that if you have exhausted regular UC and PEUC benefits in fewer than 39 weeks, you may be eligible to receive assistance under PUA for the remaining weeks within PUA’s 39-week period.

I am an independent contractor. Am I eligible for unemployment benefits under the CARES Act?

You may be eligible for unemployment benefits, depending on your personal circumstances and how your state chooses to implement the CARES Act. States are permitted to provide Pandemic Unemployment Assistance (PUA) to individuals who are self-employed, seeking part-time
employment, or who otherwise would not qualify for regular unemployment compensation. To qualify for PUA benefits, you must not be eligible for regular unemployment benefits and be unemployed, partially unemployed, or unable or unavailable to work because of certain health or
economic consequences of the COVID-19 pandemic.

The PUA program provides up to 39 weeks of benefits, which are available retroactively starting with weeks of unemployment beginning on or after Jan. 27, 2020, and ending on or before December 31, 2020. The amount of benefits paid out will vary by state and are calculated based on the weekly benefit amounts (WBA) provided under a state’s unemployment insurance laws. Under the CARES Act, the WBA may be supplemented by the additional unemployment assistance provided under the Act.

I run a nonprofit organization and am a reimbursing employer under my state’s unemployment insurance program. Due to the economic impacts of the COVID-19 pandemic, I am worried that I may be unable to timely reimburse the state for unemployment benefits it provides to my employees. What should I do?

Contact your state unemployment insurance office to learn what options may be available for delaying reimbursement payments. The CARES Act allows states to provide maximum flexibility to reimbursing employers as it relates to timely payments in lieu of contributions and assessment of penalties and interest. The U.S. Department of Labor will soon be issuing guidance on how states should implement this provision.

Am I Eligible for Regular Unemployment Compensation?

Each state sets its own unemployment insurance benefits eligibility guidelines, but you usually qualify if you:

  • Are unemployed through no fault of your own. In most states, this means you have to have separated from your last job due to a lack of available work.
  • Meet work and wage requirements. You must meet your state’s requirements for wages earned or time worked during an established period of time referred to as a “base period.” (In most states, this is usually the first four out of the last five completed calendar quarters before the time that your claim is filed.)
  • Meet any additional state requirements. Find details of your own state’s program.

The coronavirus pandemic has changed the world as we know it, costing lives and devastating the economy. People are now looking toward the future while determining their next step in the new reality. Part of the recovery process involves picking up the pieces of economic ruin and keeping or putting personal finances in order. Scammers are out to thwart this process, but you can outsmart them. Always stay alert for potential scams and practice vigilance when sharing sensitive information online or over the phone.

Stay safe!

Have you been targeted by an unemployment scam? Tell us about it in the comments.