Across the nation, criminals are targeting state unemployment insurance systems to exploit the COVID-19 pandemic. In one scam, fraudsters use personal information stolen in earlier data breaches (such as the Equifax breach of 2017) to apply for Pandemic Unemployment Assistance (“PUA”) benefits and attempt to route payments to their own bank accounts or debit cards. This article looks at this PUA scam and recommends steps employers can take to help employees whose personal information may have been misused.

What is PUA?

The PUA program was created by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act to assist individuals who are unemployed because of certain COVID-19-related reasons, but who do not qualify for regular unemployment benefits. More information about PUA from the State of Hawaii Department of Labor and Industrial Relations (“DLIR”) is available here.

Rooting Out Fraudulent PUA Claims

To root out fraud in Hawaii’s PUA system, the DLIR sent letters to a substantial number of PUA claimants asking for additional information. In the past three weeks, nearly six thousand victims have reported identity theft after receiving a letter about eligibility for PUA benefits. As of June 24, the DLIR reportedly blocked $76,644,808 in possible fraudulent PUA payments and detected a potential of $15,829,889 paid out in fraudulent benefits.

More information about identity theft and PUA fraud is available here.

How Can I Help Employees Dealing with Fraudulent PUA claims?

Advise your employees about the scam so they are aware of it and let them know what to do if they receive(d) a PUA letter and they did not file a PUA claim:

1. Report the fraud to the DLIR. Advise employees that if they receive a letter regarding a claim for PUA, and they did not apply for PUA benefits, they should follow the instructions in the letter to report the potential identity theft. Letter recipients should go to PUA.Hawaii.gov and click on the link "Use a Letter ID to Report Identity Theft.” They will need to enter the Letter ID and the Claim or Account ID found on the top right of the letter.
2. File a report with the Federal Trade Commission at IdentityTheft.gov. The likely reason an individual received a PUA claim letter when they did not file an application for PUA benefits is identity theft. It is possible the thief also used the individual’s personal information for other purposes. IdentityTheft.gov will create an identity theft report that victims can use to clear fraudulent information from their credit reports. IdentityTheft.gov also provides a step-by-step recovery plan, including placing a free, one-year fraud alert on their credit report, getting their free credit reports, closing fraudulent accounts opened in their name, and adding a free extended fraud alert or credit freeze to their credit report.
3. The DLIR also suggests that individuals check to see if their email has been breached by visiting haveibeenpwned.com.

HEC members can use this sample communication to alert employees of the scam and advise them how to handle it.

Other Fraud

Unfortunately, this is just one of the many scams proliferating during the COVID-19 pandemic. Individuals who are victims of other types of unemployment insurance fraud should report it to the DLIR at (808) 586-8947. Information on other COVID-19-related scams is available from the State Department of Commerce and Consumer Affairs, the Federal Trade Commission, and the Department of Justice.