SCAM ALERT: Mainers falling victim to unemployment fraud

AUGUSTA, Maine (WABI) - The state's unemployment system has been invaded by scammers using the personal information of Mainers to file fraudulent claims.

The Maine Department of Labor has received roughly one thousand reports of fraudulent unemployment claims.

In a press release, the DOL says they expect that number to increase as their investigation continues.

To date, they have cancelled some 2,200 unemployment claims determined to be fraudulent.

The Department of Labor put a hold on benefits for 48 hours as they investigate.

The system is already struggling to process thousands of new unemployment claims related to coronavirus.

TV 5 spoke with a woman whose husband has fallen victim to this fraud.

She wished to remain anonymous so her voice has been altered.

We'll refer to her and her husband as Mr. and Mrs. Smith.

Mrs. Smith says, "I guess we are some unintended victims of COVID."

Mr. and Mrs. Smith are essential workers and have not filed for unemployment.

She says, "So you can imagine our surprise when Friday, we get a letter in the mail from the Department of Labor addressed to him."

The letter said a direct deposit of $445 had been made to his account.

Mrs. Smith says, "The first thing we do is call the bank, and there's no $445 in his checking account."

The next day, they received a second letter explaining his unemployment eligibility.

All of his personal information was listed including his social security number.

She says, "You have to understand that this is a man who still does his checks out of a checkbook. He has nothing withdrawn from his account. We just don't know where this is coming from."

Due to the holiday, Mrs. Smith couldn't call the Department of Labor until Tuesday.

She says, "I actually phone bombed 315 times and on the 316th time, which was about four hours later, I was put on a 45 minute wait and finally reached somebody."

When she explained the situation, the rep told her they had received similar calls that day.

To expedite claims, the department began waiving the 10-14 day processing time in which they check with employers before approving a claim.

Mrs. Smith says, "They're just immediately depositing money into account, checks, debit cards, whatever so that people don't starve, which I completely understand. But, unfortunately, someone has discovered this loophole, and they are applying for unemployment under multiple, multiple names."

The unemployment benefits approved for Mr. Smith had been put on a debit card and mailed to a different address.

She says, "Why is there a discrepancy in the two addresses in their system? I would think that that would be a big red flag for them."

We reached out to Labor Commissioner Laura Fortman for an interview but were told she didn't have time.

In a press release, Fortman said, quote, "The Department of Labor takes our responsibility to defend the integrity of Maine's unemployment seriously and we will continue to work closely with state and federal law enforcement officers to prevent, identify, and rectify cases of fraud wherever they occur."

The amount of fraudulent claims in Maine remains under investigation.

Mr. and Mrs. Smith say they are worried for their financial future, "Our information is hacked. We've all been a victim of identity theft and fraud and God knows what else because of someone who is taking advantage of this whole horrible coronavirus situation, and I don't even know what the future holds for us."

According to the Attorney General, victims of identity theft and fraud will not have to repay unemployment benefits obtained using their stolen information.

Also, if a victim later needs to apply for unemployment benefits, they will still be able to do so.

Several state and federal law enforcement agencies are working together on the investigation.

The amount paid to potentially fraudulent claims in Maine is undetermined.

Based on experience from other states, the DOL says payments to fraudulent claims could total in the millions.

Governor Mills says they're working to get to the bottom of it.

She says, "I do not want millions and millions of dollars of this trust fund to go out the door to the fraudsters who are preying upon people and businesses all across this country. The result of that would be potentially increase on insurance on the employers, on the businesses in this state and other states and the result may well be the denial of unemployment claims for all the wrong reasons, that is, somebody has already filed on your behalf. That is what's happening."

The Office of the Attorney General (OAG) lists resources on their website to assist consumers with protecting themselves against identity theft and fraud. Individuals can also contact the Consumer Protection Division of the OAG at 1-800-436-2131 or via email at Consumer.Mediation@maine.gov.

The Department encourages anyone who believes that someone else has used their or their employee’s personal information to file a fraudulent unemployment application to notify the Department immediately using this form:

https://www.maine.gov/unemployment/idtheft/.