Warning: Organized Unemployment Insurance Fraud Spreads to New England

By: Arthur Elbthal – 07/15/2020

The Better Business Bureau Serving Eastern Massachusetts, Maine, Rhode Island & Vermont (BBB) is issuing a warning for an unemployment insurance fraud scam that has emerged over the last few months. 

Here is how the fraud works. People learn about the fraud when they get a notice from their state unemployment benefits office or their employer about their supposed application for unemployment benefits. If this happens to you, it means someone is misusing your personal information, including your Social Security number and date of birth. Act fast. 

The unemployment rate clocked in at 11.1% last month according to the U.S Bureau of Labor Statistics. You or someone you know may have had their personal information stolen and used to apply for state unemployment benefits. What you might not know, is that this may have been part of an organized criminal effort targeting U.S state unemployment systems. 

A New York Times article in May 2020 claimed that according to a Secret Service memo, there has been evidence of unemployment insurance fraud emerging in a handful of states, including Massachusetts and Rhode Island. Investigators estimate losses could reach hundreds of millions of dollars and noted that attackers appear to have extensive records of people’s personally identifiable information. 

“This scam is dangerous because people may not even know that someone is using their personal information for unemployment benefits until they are contacted by their employer or by their state unemployment benefits office,” said Paula Fleming, spokesperson for the local BBB. “If they have your personal information to steal unemployment benefits, they can also use that information to do damage in other ways as well.” 

Since then, states throughout New England including Massachusetts, Maine, Rhode Island and Vermont have all deployed additional identity verification procedures to ensure integrity and prevent paying fraudulent claims. 

Kristy dosReis, Public Information Officer with the Office of the Attorney General of Rhode Island commented, “Unemployment benefits fraud has certainly been a significant issue in our state, particularly during these unprecedented times of record unemployment due to the pandemic. Our Office is working closely with the Department of Labor and Training, the Rhode Island State Police and the FBI to identify and investigate these cases and ensure that Rhode Islanders who are in need right now get the benefits they are entitled to.”

What you MUST IMMEDIATELY DO if someone files for unemployment with your personal identifiable information:

• Contact the HR Department where you work or last worked
• Contact the State Unemployment Office immediately
• Inform your banking institutions
• File a report to your local police department 
• Change passwords to sensitive accounts including banking, email and other personal accounts
• Contact the three major credit reporting agencies (Experian, Equifax, TransUnion) to add an alert on your credit file and search for any other fraudulent transactions on your credit report.  Visit for FREE, https://www.annualcreditreport.com
• If your credit reports are not frozen, BBB strongly recommends you freeze them, it is a free service provided by all three credit reporting agencies. You can always temporarily unfreeze them for free when applying for credit
• Report identity theft to the Federal Trade Commission (FTC) at IdentityTheft.gov
• Keep all documents and records of conversation

Be sure to be vigilant of scams related to employment as well as other scams emerging during the COVID-19 pandemic. You can also report scams to BBB Scam Tracker.