Unemployment Benefit Fraud Runs Rampant in the U.S. as Dark Web Boasts of Stolen Records

The COVID-19 outbreak and consequent lockdowns have led to a great economic depression and unemployment across the globe. As local governments rush to provide benefits for jobless citizens, fraudsters have seemingly found success by fraudulently filling as beneficiaries.

How prevalent is the issue? 

  • The Federal Trade Commission (FTC) warned U.S. citizens that imposters are filing claims for unemployment benefits, using the names and personal information of eligible applicants.
  • The DHS’s Cybersecurity and Infrastructure Security Agency (CISA), along with the Internal Revenue Service (IRS) and the United States Secret Service (USSS), raised concerns about criminal fraud related to the CARES Act - meant for preserving people’s job and assisting SMEs.
  • The federal agencies revealed that adversaries are creating stimulus-themed emails and text messages to trick individuals into sharing their personal and banking details.

How dark web is fueling such scams?

  • According to a report published by Q6 Cyber, cybercriminals on dark web forums are promoting the best techniques for stealing unemployment benefits from unsuspecting citizens.
  • The underground service providers are offering a range of tutorials, PII, documents, and even compromised unemployment benefits accounts to claim benefits fraudulently. The tutorial guide is offered at a price starting from $50.
  • The PII includes the victim’s names, date of birth, social security numbers, address, and more. Cybercriminals leverage this ‘Fullz’ data for numerous schemes - from tax refund fraud to identity theft.
  • Likewise, a compromised beneficiary’s bank account includes bank account information, login credentials for the respective state’s unemployment benefits website and email credentials, among other details.
  • In addition, the marketplaces are also offering credit reports, W-2 forms, fake IDs, and payslips to aid criminals in their illegal activities.  

What is the magnitude of loss?

  • The state of Washington estimates that it has lost more than $500 million in fraudulent claims, recovering just $333 million. 
  • Ohio officials have reported at least 1,500 cases related to unemployment benefits fraud.
  • According to Scott Dahl, the inspector general for the Department of Labor, an estimated $26 billion could have been pocketed by fraudsters through false unemployment benefit claims. 
  • An intel report shared by Agari revealed that Scattered Canary, a sophisticated Nigeria-based cybercrime group, netted more than $4 million by leveraging fraudulent unemployment claims.  

Tell-tale signs for users 

Users should watch out for these following signs when claiming for unemployment benefits.
  • Never pay anyone to file or qualify for unemployment benefits. The claim is filed for free through a state’s unemployment insurance agency.
  • Beware of websites and social media that mimic government sites. Always cross-check the links before sharing details. 
  • Never share sensitive information over emails or text messages that appear to be from the state’s official unemployment insurance firms.