Employment Insurance and Fraud

Employment Insurance and Fraud

Employment insurance and fraud can be tricky topics for many. Whether in the insurance market or currently in one, you may wonder what the best approach is. Here are some primary areas you’ll need to keep an eye out for.

Employer fraud

Employment Insurance (UI) fraud is a growing concern. It involves several fraudulent claims, including false statements on your unemployment application, incorrect employment information, and falsifying wages. The Department of Labor estimates that up to 10% of benefits are fraudulent.

Fraud can occur through the claimant’s actions or the employer’s. A fraudster may establish a fake employer account, allowing them to make fraudulent claims against the employer’s UI account. They can also commit identity theft by using stolen personal information.

UI fraud can be prevented by ensuring your employees follow all applicable laws. If an employee reports a suspicious claim, inform them of the potential for fraud, and let them know how to write it. You can also check the Unemployment Insurance Fraud Gateway for a list of state tip hotlines.

Identity theft

When someone steals your personal information, it’s called identity theft. It’s illegal, and it can have devastating consequences. You may lose your identity, have your bank account information changed, and have to file tax forms that you don’t have to.

Identity theft and employment insurance fraud are serious problems. The United States Department of Labor has resources to help victims. They can freeze their credit, obtain a police report, and report the crime. Some financial institutions offer free credit monitoring to victims.

Identity thieves often use personal information to make fraudulent unemployment claims. This can result in overpayments. Similarly, they can create new accounts in your name and report wages you never earned. In addition, your employer’s tax rate could increase.

Employers are primarily impacted by UI fraud, and a labor watchdog recently found that more than $5.4 billion in potentially fraudulent payments have been made. DES has stepped up its efforts to prevent such fraud.

Towing operations

The towing industry has been a hotbed of crime in Canada for years. There are more than 50 arson cases connected to the towing industry. However, the towing industry is also the subject of some fraudulent activities. One example involves two services that ask for insurance information from policyholders. Some towing service providers are even engaged in firebombing.

Towing operations are a competitive industry. In some cities, towing companies tripled between 2015 and 2020. This increase in competition resulted in a more ruthless market.

Many critics blame the lack of regulation. Although some limitations exist, towing providers are notorious for engaging in illegal activity.

For example, the Division of Motor Vehicles has launched the first-ever lawsuit under the Predatory Towing Prevention Act. It has sent warning letters to nine towing companies. They also work with the Turlock Police Department to investigate towing service complaints.

Medical services

Medical services and employment insurance fraud is a severe problem that can lead to higher premiums, fewer benefits, and fewer healthy employees. In fact, according to the National Health Care Anti-Fraud Association, the financial costs of medical services and employment insurance fraud are astronomical.

Some factors can contribute to fraudulent behavior. For instance, a medical practitioner may need to be made aware of a scheme to bill for medically unnecessary procedures. Or, a physician’s assistant may use their credentials to submit a fraudulent document. A dishonest provider may even go so far as to ignore a diagnosis or refuse to provide necessary care to a patient.

However, a comprehensive program must be implemented to combat medical services and employment insurance fraud. This includes implementing a Fraud and Abuse Management System, which gives an SIU more fraud detection capabilities.


If you have been accused of employment insurance fraud, you may have to pay a fine or be banned from filing for benefits. Penalties for unemployment insurance fraud are different in each state. Some disadvantages include fines, disqualification, and incarceration.

Employment insurance fraud is the illegal use of personal information to claim unemployment benefits. Either individuals or employers commit this type of fraud. The most common claims involve intentionally misrepresenting a worker’s work status. Others include a worker intentionally not reporting wages.

Penalties for employment insurance fraud may vary based on the amount of fraud. For example, in some states, workers can be disqualified for a year if they collect unemployment benefits for more than 52 weeks. In other cases, the individual who commits fraud could have to repay a portion or all of the unemployment payments they received.