North Carolina sends thousands in fraudulent unemployment claims during COVID-19 pandemic

Diane Wilson Image
Friday, July 24, 2020
Scammers stealing identities to file NC unemployment claims
Scammers stealing identities to file NC unemployment claims

RALEIGH (WTVD) -- A Troubleshooter investigation into the state's unemployment system is getting results. The state is taking new action to protect your identity when it comes to unemployment fraud.

This action comes after we first told you the frustrations of Pete Lovett and his wife when it came to reporting unemployment fraud to North Carolina's Division of Employment Security.

Since sharing the Lovett's story, we are hearing from more victims of unemployment fraud who say they also had trouble getting the state's attention when it comes to reporting and stopping the fraud.

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Raleigh resident Robert Skinner got a check for $5,510 from the state for unemployment benefits.

"I've been self-employed for the last thirty years, and I'm doing as well as I've ever done," Skinner said. "You know I feel badly for the people that aren't, but I'm, I'm fortunate in that in my business, I'm still doing very well."

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While the check is made out to Skinner, the check's address is for the lot next door. With Skinner busy working full time, and his husband, Chapman Williams retired, Williams called the State's Division of Employment Security to report the fraud. Williams said the first representative he got was not helpful.

"She argued with me that he did apply for it because we have a case number. And I said, Well, he did not apply he's still working and has never filed, and she argued with me this morning for like 20 minutes," Williams said.

Williams said he called several more times but was on hold for hours trying to reach someone in the fraud department. He said he finally got a helpful representative who couldn't do anything about the fraud but did tell him the scammer that filed the claim used Skinner's social security number but used a different address, and a different birth date than Skinner's to file the claim.

Williams said he was told someone in the fraud department would get back to them, but it never happened.

"One hand didn't seem to know what the other hand was doing."

Meanwhile, Skinner was worried the state was still sending money to the scammer.

"I look at it as that is money that we're paying to the state, and they're just throwing it away. They are just sending it Willy Nilly to these crooks. And that's frustrating," Skinner added.

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We also heard from Chapel Hill resident Kenneth Randby after he got an unemployment check for more than $700. He's been working full time and says he never filed for unemployment.

"I tried to set up the DES website and see what was happening and when I tried to set up an account, it said an account already exists,"Randby said. "Then I realized that, I hadn't set this up, so someone else has set up an account here, so it kind of all started to come together."

Randby tried to report the fraud right away.

"I could not get through to anyone to DES."

Randby also filed a police report and requested all of the information from DES on how they were sending the scammer money.

"We could see like the banking information where the money was going and all that kind of stuff. Couldn't really do anything with it, but at least we kind of made us feel a little better that we understood what was happening. They have sent significant amount of money, but it's all going to the scammer's bank account."

Then to add to his frustrations, DES sent letters of overpayment and wanted the money back, money the scammers got.

"What I really want is just the enforcement process to stop, and then some acknowledgment from the department of employment security, that they realized that I did not file the claim. And that I will be in no way held responsible for anything at any time."

We also heard from several more victims of identity theft who also had unemployment claims filed in their names and said they were having trouble getting a hold of DES to report the fraud. Troubleshooter Diane Wilson brought all off the cases to the attention of DES, and the state reached out to them confirming the fraud.

The representative with the state says, "With the unprecedented surge in unemployment claims in recent months, we anticipate attempts to take advantage of the unemployment system through identity theft, impostor fraud, and other means. DES takes all such activity seriously."

In response to the fraud, the state says they are:

  • Increasing staffing and providing specialized training to employees to improve our response to reports of fraud.
  • Making the online fraud reporting form easier to access and providing more information about fraud prevention on the DES website.
  • Preparing to launch a telephone option dedicated to calls related to fraud.

Broader efforts include:

  • Partnering with North Carolina's Government Data Analytics Center to enhance fraud alerting capability and prevent cybersecurity attacks, with the use of $2 million from the state's Coronavirus Relief Fund.
  • Participating in the National Association of State Workforce Agencies' Integrity Data Hub, which provides a multi-state database of known and potentially fraudulent claims.
  • Monitoring and researching claims data, trends, tips, and leads related to suspected fraudulent activity or identity theft.
  • Reviewing unemployment claims using information from the National Directory of New Hires program and the Wage Crossmatch program.
  • Engaging with other states, organizations, and partners to share best practices on evolving fraud schemes.

Here are suspicious activities that the state says you should be on the lookout for:

  • Receiving communications regarding unemployment insurance forms when you have not applied for unemployment benefits.
  • Unauthorized transactions on your bank or credit card statements related to unemployment benefits.
  • Any fees involved in filing or qualifying for unemployment insurance.
  • Unsolicited inquiries related to unemployment benefits.
  • Fictitious websites and social media pages mimicking those of government agencies.

If you suspect your personal information has been used to apply for unemployment benefits, you can report it to DES by phone or by using the online Fraud Reporting Form. This will allow the state to investigate the suspected fraud and stop the payment of benefits.

When it comes to why state sends a bill for overpayment of benefits to victims of unemployment fraud, a representative with DES says occasionally the system automatically generates and sends a bill for overpayment of benefits to a victim of fraud. In such cases, the individual defrauded is not liable for the overpayment. The state says they're working on a solution to prevent these bills from being sent.

If you're a victim of identity theft, you should take these steps:

  • Filing a police report.
  • Visiting the North Carolina Department of Justice website for more information about identity theft protection.
  • Filing a complaint with the Federal Trade Commission or call the FTC hotline at 877-438-4338.
  • Contacting one of the three major credit bureaus to place a "fraud alert" on your account: