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Unemployment fraud costs victims $200 billion annually in the U.S.—here's how to protect yourself

If you've been a victim of unemployment fraud or worry about fraud in the future, here's advice from identity security firm Sontiq.

Visoot Uthairam | Moment | Getty Images

Across the country, fraudsters have been taking advantage of the spike in pandemic-related unemployment claims, filing upwards of $200 billion in claims using stolen identities.

In states like California, Colorado and Michigan, ongoing fraud investigations have revealed tens of thousands of victims, including people who are incarcerated and might not even be aware of the suspicious activity using their identities.

Nationwide investigations have led to dozens of arrests in Rhode Island, New York, Texas and Puerto Rico, among other locations. With billions lost due to unemployment fraud in the U.S., here's what you can do to keep your personal information safe, according to identity security firm Sontiq.

How to protect yourself from unemployment fraud

Stay on top of news

Fraud can happen to anyone, whether or not you file for unemployment. Therefore, it's important for everyone to stay on top of ongoing news coverage about the coronavirus pandemic, unemployment fraud and taxes.

This time of year, in particular, it's especially important to be extra vigilant. In addition to unemployment-related fraud, tax season is a common time of year for consumers to discover that their personal information has been used to file returns in their name (or their children's name). Last year, the number of fraud reports spiked in the second quarter, with nearly half of the year's tax-related fraud happening right around the time when consumers are typically getting ready to file.

Following the news helps you stay informed about methods fraudsters use, what to look out for as possible red flags and where fraud is happening in your region or state. Of course, knowing the trends and signs are not guarantees that you'll stay out of harms way, but being informed increases the chance that when something feels suspicious, you'll recognize it as such.

Learn the behavior of fraudsters

According to Sontiq, fraudsters often draw unemployment benefits using more than one person's identity, leading to a spike of activity in specific cities or states. It's also not uncommon for the scammers to file in multiple locations, meaning your name could show up in a totally random place. Look out for unexpected letters or 1099-G tax forms from any state's unemployment insurance office, not just the state you live in.

Taxpayers might also learn of fraud, or attempted fraud, in their name when they file taxes. For instance, the IRS might alert you after you file that you didn't claim all of your income from 2020, when in fact you did. If this happens, it could be a sign that someone drew unemployment benefits in your name.

Report fraud immediately

If you receive any kind of red flag, either in the mail or digitally, report it immediately following these steps:

  1. Report to your state's Department of Labor and/or fraud unit (view a full list of fraud reporting offices by state).
  2. Contact the three credit bureaus (Equifax, Experian and TransUnion) right away to freeze your credit reports.
  3. Tell your employer and state unemployment agency of the fraudulent claim and file a complaint with the Federal Trade Commission (FTC) at identitytheft.gov or call 877-ID-THEFT.

After, monitor your credit reports carefully and close any fraudulent accounts opened in your name.

Sign up for identity theft protection

While there's no surefire way to prevent fraud from happening once your information lands in the wrong hands, you can sign up to receive timely notifications about suspicious activity pertaining to your credit report through credit monitoring services.

But for added protection, invest in a service that offers support specifically for identity restoration (the process of disputing fraud and receiving reimbursement for losses). Some services even come with identity theft insurance to cover costs such as hiring a lawyer and stolen fund reimbursement.

In Select's list of best identity theft services, we recommend IdentityForce® as the overall best program for its identity theft insurance up to $1 million and certified identity restoration experts who assist consumers with all of the necessary paperwork and phone calls if they discover their identity has been compromised by criminals.

IdentityForce plans monitor thousands of websites, chat rooms, blogs and other data sources for illegal trading and selling of your personal information, including your social security number, driver's license, credit and debit card numbers and much more. Knowing if your social security number has been compromised can help alert you to the possibility that you could be vulnerable to employment fraud.

Here are four additional identity theft monitoring programs (some of which also offer credit monitoring):

For more information, check out our full list of best identity theft protection services and best credit monitoring services.


On IdentityForce®'s secure site.
  • Cost

    UltraSecure Individual: $19.90 per month or $199.90 per year; UltraSecure+Credit Individual: $34.90 per month or $349.90 per year; UltraSecure Family: $24.90 per month or $249.90 per year; UltraSecure+Credit Family: $39.90 per month or $399.90 per year

  • Credit bureaus monitored

    3-bureau credit monitoring, alerts and reports: Experian, Equifax and TransUnion®, with UltraSecure+Credit Individual and UltraSecure+Credit Family plans only

  • Credit scoring model used

    VantageScore® 3.0, with UltraSecure+Credit Individual and UltraSecure+Credit Family plans only

  • Dark web scan

    Yes, with all plans

  • Identity theft insurance

    Yes, at least $1 million with all plans

Terms apply.


  • 3-bureau credit monitoring, alerts and reports
  • Free VantageScore® 3.0
  • Dark web scanning
  • Minimum $1 million identity theft insurance coverage
  • Offers family plan


  • Plans start at about $20 per month
  • Doesn't look at FICO® Score

Our methodology

To determine which identity theft protection services offer the most benefits to consumers, Select analyzed and compared over a dozen services that offer a variety of plans.

When ranking the best identity theft protection services, we focused on the following features:

  • Cost: Typically, these services bill monthly but some have deals where you can pay annually.
  • Identity theft insurance: We considered whether the services offered identity theft insurance and looked at the amount you're covered up to. We found that the best services offer up to $1 million for eligible expenses associated with resolving and restoring your identity.
  • Wide variety of identity monitoring: The more platforms the service checks for breaches to your personal information, the better.
  • Credit monitoring: We ranked services that monitor your credit reports higher than those they don't. The best plans offer triple-bureau monitoring.
  • Family plans: If you can enroll your family members, that's an added plus.
  • Mobile app: The ability to access services from a smartphone was crucial.

Keep in mind that identity theft protection services can only alert you of breaches to your personal information, not prevent any fraud.

To learn more about IdentityForce®, visit their website.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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