My phone was ringing this week with inquiries from clients, friends and acquaintances who received a Form 1099 in the mail for an unemployment claim that they did not file, asking what should they do.

The statistics on the successful filing of fraudulent unemployment claims throughout the country in 2020 are staggering. The pandemic created higher unemployment than the country has seen in years, and fraudsters took advantage of federal and state legislation making the filing of an unemployment claim as easy as possible in order to get funds to those in need.

Unfortunately, no good deed goes unpunished, and states were hammered with fraudulent unemployment claims. The State of Washington alone estimates that it lost up to $600 million in fraudulent unemployment claims in 2020.

Some individuals received notice at the time of the filing of a fraudulent unemployment claim made in their name and were able to stop it. If you didn’t receive notice at the time of the filing, and the perpetrator was actually successful in using your personal information to obtain unemployment benefits in your name, you will find out when you get a Form 1099 in the mail for your taxes. What a nightmare.

If this happened to you, here are some ideas and resources that may help.

  • Contact the state agency that issued the 1099 and report the fraud. Usually there is a toll-free number or website at the bottom of the 1099 that you can contact.
  • Keep records of all telephone calls, emails or any other conversations you have with the State agency when reporting the fraud so you can document your report of fraud in the event you need it later.
  • If you are asked by the State agency to provide a copy of the 1099 to them to evidence the fraud, redact your Social Security number and write “fraudulent claim” on it when you send it back to them.
  • Give all documentation that you have of the fraud and your report of the fraud to your tax preparer.
  • For more information, here are two resources that may be helpful to you.
Photo of Linn Foster Freedman Linn Foster Freedman

Linn Freedman practices in data privacy and security law, cybersecurity, and complex litigation. She is a member of the Business Litigation Group and the Financial Services Cyber-Compliance Team, and chairs the firm’s Data Privacy and Security and Artificial Intelligence Teams. Linn focuses her…

Linn Freedman practices in data privacy and security law, cybersecurity, and complex litigation. She is a member of the Business Litigation Group and the Financial Services Cyber-Compliance Team, and chairs the firm’s Data Privacy and Security and Artificial Intelligence Teams. Linn focuses her practice on compliance with all state and federal privacy and security laws and regulations. She counsels a range of public and private clients from industries such as construction, education, health care, insurance, manufacturing, real estate, utilities and critical infrastructure, marine and charitable organizations, on state and federal data privacy and security investigations, as well as emergency data breach response and mitigation. Linn is an Adjunct Professor of the Practice of Cybersecurity at Brown University and an Adjunct Professor of Law at Roger Williams University School of Law.  Prior to joining the firm, Linn served as assistant attorney general and deputy chief of the Civil Division of the Attorney General’s Office for the State of Rhode Island. She earned her J.D. from Loyola University School of Law and her B.A., with honors, in American Studies from Newcomb College of Tulane University. She is admitted to practice law in Massachusetts and Rhode Island. Read her full rc.com bio here.