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Colorado's unemployment fraud issues believed to be widespread and costly

"This is a $30 to $40 billion nationwide problem"
Posted at 5:41 AM, Jan 11, 2021

COLORADO SPRINGS — Fraud experts believe unemployment fraud is a costly and widespread problem in our state. After News5 shared the warning about suspicious unemployment mail with our viewers last week, we began to get messages and social media comments showing just how widespread the problem is.

People across Colorado say unemployment benefits letters that they never requested are showing up at their homes issued by the Colorado Department of Labor and Employment and often includes a bank card and pin number.

Colorado's labor department discovered fraudsters are using rental and for-sale home listings to get addresses to apply for and send these pieces of mail before stopping by to steal the unopened mail to access the bank card, pin number, and benefits in the name of victims.

Fraud experts say criminals have accessed our personal information from data breaches — or purchased it from the dark web. In Colorado and other states across the country, this kind of unemployment fraud is turning out to be costly.

"We believe that this is a 30 to 40 billion dollar nationwide problem. That's what we estimate, but again it's very difficult to quantify that number. Colorado specifically has been one of the targets. It started in Washington State in the spring and it's moved around, but Colorado always seems to come up on the radar," said CSU Global's Dr. Fraud J. Michael Skiba.

There has been such a large uptick in Colorado's unemployment claims recently and fraud investigators are concerned.

"That pool of unemployment benefits is already limited, right? So, if you have scammers that are pulling away from that. If they are taking half, I've seen some very disturbing statistics. Anywhere from 25 to 50 percent of these unemployment claims are fraudulent. It's very, very, disturbing," said Dr. Skiba.

Remember these are the steps to take to address this if one of these unemployment benefits mailers shows up in your name. Destroy and report the bank card, contact the state, and make sure to monitor your credit for any other suspicious activity or identity theft.

The Colorado Department of Labor and Employment is trying to get a handle on this situation by adding layers of security to verify people applying for benefits are really who they say they are.

In addition to these challenges facing Colorado's labor department, over the weekend it was discovered that scammers had set up a fake Twitter account "@LaborColorado" posing as the labor department seeking sensitive personal information.

The verified Twitter account for the Colorado Department of Labor and Employment is @ColoradoLabor.

Here is a link provided by the State of Colorado to help anyone who has received this unexpected piece of mail: https://cdle.colorado.gov/fraud-prevention

UPDATE: Some people may also be getting unexpected tax forms tied to the unemployment fraud. Here's where you can report that: https://co.tfaforms.net/f/Report_Invalid_1099

For previous coverage of this story: https://www.koaa.com/news/news5-investigates/major-problem-in-colorado-criminals-try-to-claim-unemployment-benefits-in-your-name