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Unemployment Fraud in United States

Updated : September 23rd, 2020

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. If I’m laid off and I go back to work for three or four weeks and get laid off again do I have to do the one week waiting period before I can collect again?

  2. I was informed by the automated phone system that my claim for last week 06/12/2021 was not processed due to an outstanding issue on said claim. I have tried for four days to reach a human to assist me in this matter. It’s been impossible! Please help.

    1. Anne,

      Wish we could do something for you. This is a private forum. Please continue following up regularly. You can perhaps write them an email.

  3. I am trying to request payments from aug 2015 up until 2017 I never received a debit card and just assumed that I was denied. So i did not request payment but would like to now

    1. Katrina,

      That period is past and you might not be able to claim retroactively. Please write the office an email if you wish to.

  4. Ive provided documents that were needed and i have not receive any type of response i have went without benefits for 6 weeks could someone please contact me

    1. Sondra,

      Please note this is a private forum and we do not have access to your claim. Please follow up with the office directly.

  5. To whom it may concern, Please what is wrong with the site to claim weeks? I am at the Career Source and they said it has been acting up for 2 days. I am frustrated so I can imagine how many others are like me. I was laid off 4/16/2021. My UI is showing active but still under review. Is there anything you need from me to get this going? I will give it to you. Please July rent coming up. I am tapped from asking from family to get me thru now. Please please please any answers for me? I am begging right now. I can not be late on rent or they will not renew my lease when it is time. I can not move, to costly. I have been here for 20 years. Please any suggestions. I will pay back July rent if my UI goes thru. No reason why it shouldn’t. Please help. Thanks again, Kay

    1. Kay,

      It must be a tough time for you. This is a private forum and we do not have access to your claim. Please chase the Office directly.

  6. I just filed for my first weeks benefit and am trying to change the payment method. It does not give me the verify who you are questions?

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