How to Respond to Identity Theft Related to Unemployment Benefits

 Posted on April 19,2021 in Estate Planning

In a recent blog, we looked at the issue of tax-related identity theft, which can occur when a person steals someone else’s information and files a fraudulent tax return in their name. Another form of identity theft that is sometimes related to these illegal practices involves a person applying for unemployment benefits in someone else’s name. Unfortunately, this practice has become more widespread during the COVID-19 pandemic as scammers attempt to take advantage of expanded unemployment programs. Individuals and families who are building a wealth protection strategy will want to address any forms of identity theft quickly and take the proper measures to ensure that they will not be victimized by this type of fraud.

Reporting Unemployment-Related Identity Theft

In many cases, people become aware that they have been the victim of identity theft when they receive notice of unemployment benefits being paid in their name, even though they never applied for these benefits. In other cases, a person may receive a 1099-G tax form stating that they received unemployment benefits and are required to pay taxes on the amount that was paid out.

After learning of a false unemployment claim, Illinois residents should immediately contact the Illinois Department of Employment Security (IDES) in writing to report the identity theft. A victim of identity theft will not be required to repay IDES for any fraudulent benefits that were paid out, and they will be able to receive unemployment benefits in the future if necessary. The IDES has noted that due to widespread unemployment fraud, notices may be sent out stating that a person must pay back an overpayment of benefits. Those who have reported identity theft can ignore these notices, although they may want to contact the IDES to verify their requirements.

After reporting identity theft to the IDES, a person should notify their employer, who can also receive protection from the requirement to pay back benefits obtained fraudulently. A victim can also register with the Federal Trade Commission through identitytheft.gov to report the identity theft. They can also take additional steps to protect themselves, including contacting credit reporting agencies (Experian, Equifax, and TransUnion) to notify them of the identity theft and placing a freeze on their credit to ensure that no new accounts can be opened in their name. Victims of identity theft may also want to use services such as LifeLock, Identity Guard, or Identity Defense to monitor their information and prevent any future attempts to steal their identity.

Contact Our Kane County Wealth Protection Lawyers

Identity theft can affect your finances, your credit, and your ability to provide for yourself and your family in the future. At Ariano Hardy Ritt Nyuli Richmond Lytle & Goettel, P.C., our lawyers can help you take the right steps when responding to identity theft, and we will work with you to make sure you have the proper legal protections in place. Contact our Elgin estate planning attorneys at 847-695-2400 to arrange a free consultation today.

Sources:

https://www2.illinois.gov/ides/Pages/Report-Identity-Theft.aspx

https://identitytheft.gov/UnemploymentInsurance

https://www.irs.gov/newsroom/irs-offers-guidance-to-taxpayers-on-identity-theft-involving-unemployment-benefits