When Liz Leith, director of finance and administration at the Online News Association, returned from ONA’s Insights conference last October, she wanted to rest and enjoy her weekend. However, she had a weird piece of mail waiting for her: a “letter of determination” from the Washington, DC, Department of Employment Services (DOES) saying her unemployment benefits had been approved. But Leith hadn’t applied for benefits. She was still employed.

Lucky for Leith, because of her role at ONA, she had access to the organization’s DC DOES account. When she logged on, she saw nothing amiss. Then, she decided to do some sleuthing. Leith had never set up a personal DC DOES account, but she acted as if she did and plugged in her social security number and selected “forgot password.” The site told her it would resend her password to an AOL email address. However, it wasn’t an email address that belonged to Leith.

Leith used an online form to report the fraud, and over the next weeks made several calls, spending hours on hold to ensure DOES understood this was fraud. It wasn’t until December that Leith got written confirmation the department considered it fraud and no benefits would be paid. It was also in December that Leith received the letter DOES sent to ONA’s office asking the organization to confirm she was unemployed.

“We did not get an email,” Leith said. “They just do it by snail mail. If you’re not on top of it, this could easily get lost.”

A Widespread Problem

Leith’s tale is not uncommon, says Eva Velasquez, CEO of Identity Theft Recovery Center (ITRC). “This type of identify fraud really spiked in 2020 and came to a peak in 2021,” she said. “And it is still occurring, but not at the rates previously.”

While ITRC helps victims figure out how to resolve these issues, Velasquez says this crime is impossible to prevent. “This is one of the reasons this type of identity crime is so insidious,” Velasquez said. “All of the remedies that are available are all after the fact, time-consuming, and unfortunately, rely exclusively on an overwhelmed and generally understaffed state agency that has sole jurisdiction over the issue.”

To minimize the impact of this crime on your association and employees, it’s important to respond to any requests from state employment agencies.

“If you do receive a notice from a state employment agency seeking to verify a real, or even an imaginary, employee’s status, you need to respond immediately,” Velasquez said. “Don’t put it aside. Sometimes we think, ‘That’s a mistake. I’ll get to that later.’ No. That’s something you want to address right away.”

If an association gets a request for an employee who still works there, immediately alert the employee, and then both the employee and the organization should report the fraud to their state agency. If this crime is missed in the early stages, this is the time of year that employees might find out about it.

“They need to be on the lookout for 1099Gs, which we do think we are going to see more of this tax season,” Velasquez said. Those 1099Gs report unemployment income and go to the federal government, which will expect the employee to pay taxes on that income unless the employee shows it was fraudulent.

Associations that rely on payroll or HR companies may think those companies will take care of this, but that may not be the case. “You can’t abdicate total responsibility for this, even if you have outsourced some of those operations,” Velasquez said. “At the end of the day, you’re still responsible for the health and wellbeing of your employees, so it’s probably best to ask [the company you outsourced to]: What is your process? Are you tracking this? Would you get the notice, or would we? Who handles that? Is this out of the scope of our agreement? There’s a lot of meat there that businesses want to address before they encounter a problem.”

While employees hit with this face all the hassles associated with identity theft, associations could also see higher unemployment insurance rates if their state believes they’ve terminated an excess number of workers. This is something Leith was concerned about. “Right now, we’re paying the lowest rate [for unemployment insurance], but if we had even one claim, our rate would go up, and we would be paying a higher percentage on all of our wages,” she said.

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