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Unemployment Fraud in United States

If you knowingly receive benefits based on ungenuine information that you purposely provided when you registered your claim, you are committing fraud. Anyone who commits unemployment insurance fraud is liable to be punished by law and could even face a variety of serious penalties and consequences.

For most jobless workers and their families, UI benefits are continued survival. Unfortunately, a few can ruin a good thing. If you file for benefits and try to receive income that in any way misguides the government, you could be guilty of fraud. Unemployment fraud is a crime in every state and the violators could be charged with fines and even imprisonment.

A nationwide suppression is coming for people unfairly drawing unemployment payments- those who were never eligible and people who have begun working in new jobs but keep getting their unemployment checks. With the poor economy remaining and the jobless rate remaining high, many states are stepping up efforts to stop the improper payments.

You’d think the debt crisis would result in crackdowns on government, but as the claims increase in this jobless recovery, blames in unemployment insurance have hit record levels. Last year, ineligible individuals were paid out a huge $16.5 billion. In the recent months, over-payments have jumped again to 11.6 percent. According to Labor Department’s estimation made in 2010, 30 percent were individuals who continued to cash their UI checks when on work and another 30 percent were people not properly or actively searching for work.

What is considered unemployment fraud?

Unemployment fraud can be someone telling a white lie to extend their benefit or it can also include the fake policies being sold.

Here are a few of the most common examples in which you are held legally liable responsible for your insurance benefits:

Looking for Work

You are required to actively look for a work as a condition of unemployment collection and be mentally and physically able to work unless you’re on a temporary dismiss or a union worker. It is mandatory to attest to that fact each time you file a weekly payment claim. If you do not seek work and lie about looking for work or about being able to work…guess what? You’re committing a crime.

Personal Information

When you apply for an UI benefits claim, your application is a legal document. You are expected by law to provide your personal details like name, social security number, current phone number, current address and current employment information. Any misrepresentation of your identity and employment situation is considered fraudulent. Using anyone else’s personal information to collect benefits is identity theft.

Reporting Income

Besides being eligible and seeking work, you must also reveal any extra income you earned. For instance, if you earn from some freelance consulting or do part time job, you are required to disclose these wages. Any extra income you earn from part time or freelance work is figured out into your benefits claim. If you fail to report additional income while you are receiving state unemployment pay is an offence. It is advisable to give the most correct information you can when filing for your unemployment benefits.

Laid-off workers, Be Alert!

Some of the insurance companies and those who sell fake policies know it will probably be some time before you actually collect on your policy. This makes it very simple for them to take your money and run as by the time you actually claim on your policy they are gone. Do not give any personal details over the Internet. Once they have your account numbers they can do far more damage than a fraudulent policy. If the company is registered in your state, then go ahead and purchase. Finally, it is good to purchase policies from large and reputed companies and avoid becoming victim of unemployment benefits fraud.

Online unemployment fraud

Any organization with a website is not a business. You are likely to deal with a scam company if the legal framework is not there. All authorized US companies have a federal tax ID number that are confidential and not to be shared with customers without reasonable purposes. The products offered by the illegitimate companies do not have any guarantee and the services are not insured. They are not paying taxes and therefore not contributing to the economy and encouraging illegal employment in the US or offshore.

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    1. Angie,

      The E.U.C(Emergency Unemployment Compensation) remains expired. There is no extension available. Please inquire further with the labor authorities in your state by calling them.

  1. I have exhausted my unemployment benefits in the state of Texas. When I called and asked how to go about with the extension, I was told that the extension were done away with in 2013. I’ve been looking for work and have yet to find something. Is it possible to receive an extension or are my exhausted benefits the end of the line? And if there is a way for an extension, how do I go about the claiming process?

    1. Jarese,

      I can understand your situation. The E.U.C(Emergency Unemployment Compensation) remains expired. There is no extension available.

  2. I’ve been receiving UI bennifits for 3 months. I was surprised yesterday when I opened an email asking for one of the companies information, why I left, etc. I called the UI office this morning and was told that this fortune 100 company is able to reply, furthermore fight my claim and possibly making me pay back the claim. I’m just very confused how they, the old company can chime in 12 weeks after my claim was already processed. Even more confused, as the original letter has that companies name on it.
    Thanks!

    1. Evan,

      If you suspect something amiss, please raise an issue with the Unemployment Office. This might be a classic case of fraud.

  3. Hi Jeff,
    I am in California and last month I exhausted all of my unemployment, I turned 61 and never thought that age would be such an issue but can’t seem to land a job. Question – if I don’t get a job by the end of my “current benefits years end” can I open a new claim and be able to receive additional unemployment after my current benefits year runs out?
    Thanks, Don

  4. Can you receive unemployment while receiving severance payments or do you need to wait until all severance is paid to start receiving unemployment?

      1. I’m confused. When I called the Texas Workforce Commission they said Emergency Unemployment Compensation has not been offered in Texas since 2013.
        I asked about Extended Benefits. They took my information and I received a determination that I was eligible. The next day I got another determination that I was not eligible due to:
        ” Issue: Insufficient Wages Between Benefit Years
        Decision: Your claim is not valid. We have cancelled your claim and cannot pay you benefits.
        Reason for Decision: Our investigation found you have not earned wages equal to six (6) times
        your weekly benefit amount since the beginning date of your last benefit year.
        Date of Cancelled Claim: 09-22-19
        Beginning Date of Your Last Benefit Year: 09-16-18
        Law Reference: Subsection 207.021(a)(7) of the Texas Unemployment Compensation Act.”

        Actually I had earned ~30k from a severance package since the beginning date of my last benefit year.
        Six times my weekly benefit amount is only~ $3k??

        Any idea?
        Any help would be appreciated.

    1. If you are receiving continuing severance payments, you are not eligible to file for UI benefits until those payments end. You should file your claim after 7 days of the receipt of your last severance payment.

  5. I have been trying very hard to get a number I can call to have one (1), I say again one (1), question answered. I am a contractor and have been working in many states in the course of my career. My last job was here in Mobile AL at ST Engineering Aerospace and I saw something about needing to be employed for 18 months in Alabama to qualify for benefits. I had a claim in Tennessee and they have a way of filing when you have worked in different states. I forget what it is called but my question to you is does Alabama have a way that I can file after working in different states?

    1. Kevin,

      Please note this is a private forum. If you’ve filed from TN, suggest you reach out to the Unemployment Office for clarification.

  6. DO YOU HAVE TO ACCEPT A POSITION THAT HAD OFFERED YOU SIGNIFICANTLY LOWER WAGES THAN YOUR PREVIOUS EMPLOYMENT; ESPECIALLY IF THE WAGES DO NOT COVER YOUR MONTHLY FINANCIAL
    OBLIGATIONS?

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