Unemployment benefits fraud

Identity theft is a crime in which an imposter obtains key pieces of personally identifiable information, such as Social Security or driver's license numbers. Criminals use this information to impersonate someone else, usually for financial gain.

When someone illegally files an unemployment claim using another person’s personal and employment information.

Many people find out when they receive a letter they were not expecting from the Employment Security Department. Many also find out when Employment Security notifies an employer that a current employee has applied for unemployment benefits. The employer then notifies the employee.

Some may learn they’re a victim of fraud when they get a 1099-G tax form for benefits they didn’t receive in 2021. Learn more about tax info for fraud victims.

If you get a 1099-G that includes unemployment benefits you never received, you may be a victim of fraud. Learn more about tax info for fraud victims.

If you have reason to believe someone has applied for unemployment benefits using your information, report it immediately to the Employment Security Department. Select the Fraud reporting form button above to securely send us your information.

After reporting the fraud to ESD, follow the instructions under What should I do if I’m a victim of identity theft? below.

Employers should:

• Immediately notify their employees about the fraudulent claim. Then either:
• Instruct employees to securely report the fraud to the Employment Security Department using the Fraud reporting form linked above.
• Or securely report fraud on behalf of their employees by using the Benefit Fraud Employer Reporting Template linked above. The Benefit Fraud Employer Reporting Template may be useful for providing information about multiple employees and to promptly stop payments on the claims.
• Instruct employees to follow directions below under What should I do if I’m a victim of identity theft?

• Go to the Attorney General’s Recovering from identity theft or fraud web page and follow the instructions.
• File a complaint with the Federal Trade Commission (FTC) online at identitytheft.gov or call 877-ID-THEFT. In addition, the FTC recommends that you:
• File a police report. Get a copy of the report to submit to your creditors and others that may require proof of the crime.
• Place a fraud alert on your credit reports and review your credit reports periodically to ensure no new fraudulent activity has occurred.
• Close the accounts that you know or believe have been tampered with or opened fraudulently.
• Request your free credit reports via annualcreditreport.com and review them for other fraudulent activities.

No. You will not need to pay back the money. Your employer won’t have to repay it either.

Yes. We’ll be able to distinguish your legitimate claim from a fraudulent one.

For those who have not yet received any payments, we are continuing to work through these claims as quickly as we can. We apologize deeply for the frustration and anxiety these delays may have caused. Getting payments to all eligible Washingtonians is our top priority.

We have four main ways of detecting fraud:

• Our system can spot and flag irregularities.
• We cross match our data with multiple other sources, including a new national fraud detection system.
• The victim reports fraud.
• The victim’s employer reports it.

ESD:

• Is working with other states and the federal government to cross match data to detect fraud.
• Has hired additional fraud investigators and continues to use standard and creative information security practices.
• Has delayed all payments to all claimants by two business days to allow time to root out fraudulent claims.

There has been a big increase in imposter fraud.  One of the ways we are fighting fraud is to hold UI benefit payments while we do additional reviews for potentially fraudulent claims. This is what you can expect:

• Weekly claims are normally processed for payment the night you submit your weekly claim. 
• All weekly claims will be held for two calendar days while they are reviewed.  They will show as “processing” in your eServices account. 
• Once the payment is fully processed after the two-day hold, it will show as “paid” in eServices. 
• IMPORTANT: Once the status in eServices shows as “paid,” it will take two to three business days for the money to reach your direct deposit or debit card account.

No and perhaps. Unemployment taxes have two parts: One is the experience rated tax employers pay based on how many of their former employees have received unemployment benefits. The other tax is a pool all employers pay into to cover other costs of benefits and those instances when no specific employer pays for benefits. That’s called the socialized portion.

When employees are victims of fraud, their employers will not see an increase in their experience rating. However, we don’t know yet if the socialized portion of unemployment taxes will go up as a result of fraud and other factors. It could.

Like many states throughout the nation, we experienced an imposter fraud attack early in the pandemic. These criminals used personal information, stolen outside of ESD’s system, to fraudulently apply for benefits using other people’s identities. We took a number of measures to stop and prevent further imposter fraud, which were successful. This was highlighted in a recent audit by the State Auditor’s Office, which stated, “ESD did not make significant payments to fraudsters after [the May 2020 attack] despite high demand for unemployment assistance throughout 2020.”

In total, the agency estimates between $550-$650 million have been stolen. The agency has recovered $370 million, as of a March 2021 report from the State Auditor’s Office. We continue to work with law enforcement and financial institutions to recover funds and hold these criminals accountable.