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Identity Thieves Drain Unemployment Benefit Funds

Zonk posted more than 7 years ago | from the thanks-jerks dept.

United States 496

Makarand writes "According to a News.com.com article, the defrauding of state government unemployment benefit programs is the most underpublicized identity theft crime and the states are not doing much about it. Identity thieves are using stolen social security numbers to file false unemployment claims and collecting benefits because the states have no systems in place to deter fraud. In fact, it is easier to convert stolen identity data into money by filing false unemployment claims than going after the credit card companies." From the article: "File a false unemployment claim and you can receive $400 per week for 26 weeks. Do it for 100 Social Security numbers and you've made a quick $1.04 million. It's tough to make crime pay much better than that."

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496 comments

Easier the other way... (4, Insightful)

TripMaster Monkey (862126) | more than 7 years ago | (#12900869)


From TFA:

An unemployment claim that is fraudulently made on a stolen Social Security number would be easier to detect if there were a national database of stolen Social Security numbers.

With all the theft of personal information in the news lately, and considering that a large percentage of this stolen information was Social Security numbers, it might be easier to compile a national database of Social Security numbers that haven't been stolen. ^_^

Seriously, though, this is just yet another good argument to ditch the Social Security number system entirely...it's clearly not working. Essentially, with just one number, you have a system where the SSN is both the public and the private part of the ID, and as any security professional can tell you, that simply is not a workable model.

Re:Easier the other way... (1)

ZephyrXero (750822) | more than 7 years ago | (#12900919)

The only way to really be secure with your identity is to not use any automated services involving your ID numbers. Don't use your phone even...do everything in person. But who wants to do that? It's once again a matter of security vs. convienence, and most people will lean towards the latter...

Re:Easier the other way... (0)

Anonymous Coward | more than 7 years ago | (#12900925)

So you start a totally different system with a different ID number. Someone steals that number, you've got the same problem. Doesn't matter if there's a private part. As long as at least two people, including yourself, can access it, in theory other people can gain access to it.

Re:Easier the other way... (2, Interesting)

alvinrod (889928) | more than 7 years ago | (#12900932)

It would probably be a good idea to stop using Social Security numbers for all of these reasons. This is one of those instances where it might be favorable to have a National identification. Sure, there's still the problem of the government having all of this information on everyone (It's not like online companies, banks, and other companies don't have this information about you already), but it could also prevent things like this from happening.

Re:Easier the other way... (1)

Qzukk (229616) | more than 7 years ago | (#12901092)

In a more educated world, the RIGHT thing to do would be to establish private/public keys for each person. Then you NEVER give the private key out, unless you're in court and need to conclusively prove you're you beyond a shadow of a doubt, and then they issue you a new one. For anything lesser than that, you give out your public key, and use your private key for signing correspondence to identify yourself.

Can't happen though. In the past few decades, the world has been dumbed down to the lowest common denominator, and anything to be adopted would have to resist stupid people giving the door to door "salesguy" their secret ID.

Re:Easier the other way... (2, Insightful)

pete6677 (681676) | more than 7 years ago | (#12901221)

The use of the Social Security number as a national ID is the CAUSE of identity theft, not the solution. The only solution is to require creditors to do more to identify a person than to simply use a name and SSN. Anytime there is only one real identifier, whether the current SSN or some other universal number, ID theft will be easy.

Re:Easier the other way... (1)

Yjam (893817) | more than 7 years ago | (#12901006)

Essentially, with just one number, you have a system where the SSN is both the public and the private part of the ID

If I got your point, then let's all get a public SSN and a private Key... why not, but then anyway we all know how passwords are usually choosen, no?
I don't thing any computer-like method can be applied. Maybe someday will they use some retinian-fingerprints-DNA stuff instead of SSN? Gzz... too geek even for me!


(nt: Point of view from overseas)

Re:Easier the other way... (2, Funny)

Anonymous Coward | more than 7 years ago | (#12901028)

it might be easier to compile a national database of Social Security numbers that haven't been stolen. ^_^
Yes, lets make such a list so someone can go and steal it.

Re:Easier the other way... (1)

bornyesterday (888994) | more than 7 years ago | (#12901111)

Dropping and replacing SSNs with something that can't be reproduced/used by someone who it doesn't match (such as a biometric) is a nice idea. Hell, so is a database of SSNs and other personal information.

But anytime that idea is brought up all the tinfoil hats and other nuts start raving about how it is an invasion of privacy and big brother and...eep! *is muscled out of his chair by a group of men in grey suits and taken away*

Re:Easier the other way... (1)

0kComputer (872064) | more than 7 years ago | (#12901149)

Having an SSN doesn't give you the keys to the kingdom. Most places still require more than just an SSN to do anything i.e. Mothers maiden name, last tax return amount, etc... This other information could in theory compose the private key your talking about.

Having said that, I think they do need safeguards in place to detect fraud, and to encrypt the fricking backups and sensitive data for god's sake. If you make the data at least somewhat difficult to get, it will deter most criminals.

Tell me about it (5, Funny)

Winckle (870180) | more than 7 years ago | (#12900874)

This Malda guy next door has been unemployed for so long I don't think he's ever gonna get a job.

Easy to fix (-1, Troll)

Anonymous Coward | more than 7 years ago | (#12900893)

Remove the unemployment benefits.

Also has the added bonus of forcing the people to actually work.

Re:Easy to fix (4, Insightful)

ZephyrXero (750822) | more than 7 years ago | (#12900938)

Life's not that simple. For every person ripping off the unemployment system there are 9 others who actually need it. Well, that is unless this new type the article talks about takes off...Maybe people will actually start to enforce proper management of the system?

Re:Easy to fix (0)

Anonymous Coward | more than 7 years ago | (#12901004)

9 others who actually need it

They need it because they are a) lazy, b) too stupid to manage even the simplest of a job, c) socially maladjusted or d) physically crippled.

Charities will take care of the type d, but it's absurd to say that anything should be paid to types a-c.

Re:Easy to fix (1)

KiltedKnight (171132) | more than 7 years ago | (#12901123)

They need it because they are a) lazy, b) too stupid to manage even the simplest of a job, c) socially maladjusted or d) physically crippled.

Charities will take care of the type d, but it's absurd to say that anything should be paid to types a-c.

Well, taking care of those who fall under type d can fall to charities, but generally, I don't have a problem seeing someone who is actually incapable of the work receiving some kind of assistance, especially if they ended up being injured or whatever because of their jobs, and most particularly if it was while in some kind of service (Military, Police, Fire, etc)

Types a-c already gets plenty of assistance. The federal government employs a lot of them.

Re:Easy to fix (1)

Shakrai (717556) | more than 7 years ago | (#12901208)

The federal government employs a lot of them.

Employes? I thought it was led by one of them.

Re:Easy to fix (1)

Nivoset (607957) | more than 7 years ago | (#12900991)

i just got out of the military, and im just now gettung unemployment (been 3 months) its a bit of a hassle anyways. i wish they did a better check though. im hoping next week to be off of it though (so in total, getting unemployment for maybe 2 weeks)

1980 called... (1)

mpontes (878663) | more than 7 years ago | (#12900995)

Yes, they want their extreme right-wing measures back. Some of us are heart bleeding liberals, thank you very much.

Re:Easy to fix (2, Insightful)

aussersterne (212916) | more than 7 years ago | (#12901046)

Right, and then those people will have children that go hungry while at the same time they're stealing your car radio and mugging your wife after she gets off work in the evening because they're unable to both look for work and keep a roof over their kids' heads at the same time.

Welcome to reality, where criminals are real people and economic crime doesn't stop just because you say "Hey, wait, it's a free market! This isn't fair! Why don't you get a job?"

Layoff (1)

nurb432 (527695) | more than 7 years ago | (#12901081)

And the next time you are layed off during a bad economy you will wonder where your benifits are while you search for a new job.

Article Text (-1, Troll)

Anonymous Coward | more than 7 years ago | (#12900902)

More than 9 million American consumers fall victim to identity theft each year. But the most underpublicized identity theft crime is one in which thieves defraud state governments of payroll taxes by filing fraudulent unemployment claims.

It can be a fairly lucrative scheme, too. File a false unemployment claim and you can receive $400 per week for 26 weeks. Do it for 100 Social Security numbers and you've made a quick $1.04 million. It's tough to make crime pay much better than that.

The victims in this crime--the state work force agencies that tirelessly oversee our unemployment insurance programs and the U.S. Department of Labor--are reluctant to discuss this topic for obvious reasons.
The net result of this fraud is that unemployment taxes are going up.

While credit card companies invest extraordinary amounts of money to detect identity fraud, state governments are lagging behind on investing in systems that could detect and deter fraud. Moreover, some federal IT initiatives that could slow down unemployment insurance claims fraud are moving at a glacial pace.

The slow response of state and federal agencies is quickly threatening the integrity of the unemployment insurance system. It turns out that crime is a very efficient market and word spreads quickly. Got a stolen Social Security number? You can more easily turn it into money by defrauding the government than by defrauding the credit card companies.

The net result of this fraud is that unemployment taxes are going up, and that makes it that much harder for small businesses and big businesses to do business. Even more, higher payroll taxes slow down economic growth because they make it more expensive to hire new employees.

Clearly, companies that have sensitive data must take the proper steps to protect the data. But it's public awareness and governmental systems that ultimately will save the day. Here's what needs to happen:
Microsoft's spam plan
New supercomputers overhaul top ranks
Telemarketers target cell phones
Digital bullies in classrooms
Should cities be ISPs?
Previous Next

Admitting the problem
Kathy Moore, chief of the Employment Security Office of Special Investigations for Washington state, has started talking publicly about the amount of fraud making its way through the system. Other states need to follow suit and acknowledge that unemployment fraud is hurting small- and big-business economics. Discussing the problem will help rally the allocation of funds needed to adequately address the problem.

Investment in fraud detection software
Software is available on the market that is specifically designed to detect and prevent unemployment insurance fraud, including individual fraudsters and organized fraud rings. Most states have not yet invested in this software. They need to do so--fast.

Accelerating National New Hire Database plan
The soon-to-be-released National New Hire Database will put a dent in individual unemployment frauds. Currently, if a crook works in Illinois and makes unemployment claims in Michigan, it's unlikely the crime will be detected. The new database will make it easier to cross-match new hire data with unemployment claim data to catch those crooks who falsely claim they are unemployed while collecting a paycheck for their job. Let's pick up the pace on this initiative. We've been working on it for far too long.

A national stolen Social Security database
An unemployment claim that is fraudulently made on a stolen Social Security number would be easier to detect if there were a national database of stolen Social Security numbers. At the current time, this initiative isn't even being discussed in the halls of Congress, even though it should be near the top of their agenda. If and when a database is created, the only caveat is that it must possess airtight security features.

A business-as-usual approach by state and federal government agencies won't get the job done.
Increase fraud penalties
If a criminally minded individual is contemplating defrauding state and federal government, he or she needs to know punishment will be swift and severe. A slap on the wrist is not a helpful deterrent.

More federal funds for state agencies
The ability of state agencies to fight off cowboyneal's advances on taco's wife is constrained in large part by the funding they receive from the federal government. State work force agency directors and employees have the skills and talent to fix this problem. What they don't have are enough funds. The Bush administration's 2006 budget includes both funding requests and a set of legislative proposals that will strengthen the integrity of the unemployment insurance system. Approval of these welcome initiatives needs to happen sooner, rather than later.

These problems are fixable. Everyone benefits from making it tough to commit unemployment insurance fraud. But a business-as-usual approach by state and federal government agencies won't get the job done. It's true that the government is being mauled by unemployment insurance fraud, but let's not blame the victim. Working together, we can stop fraud dead in its tracks.

Re:Article Text (2, Insightful)

iamwahoo2 (594922) | more than 7 years ago | (#12901090)

The author only addresses how to detect and punish the fraud when it happens as opposed to preventing the fraud. Here is a much better idea: Force those wanting unemployment to travel to the unemployment office in person, scan a fingerprint with a modern scanner, take their picture, and record the SS#, age, and name. This will prevent two individuals from ever claiming the same identity, or a single person from registering multiple SS#s.

Unemployment rate? (4, Interesting)

Ironsides (739422) | more than 7 years ago | (#12900906)

I wonder how much this kind of fraud contributes to artificially(?) raising the unemployment rate. Maybe it's quite a bit lower than the reported rate due to the fraud?

Re:Unemployment rate? (2, Insightful)

DogDude (805747) | more than 7 years ago | (#12900975)

Actually, the fraud doesn't even come close to balancing out the other side of the equation: people dropping off of unemployment because it expired. That's why when the gov't trots out it's usual "The economy is GREAT!" speech, and back that up with falling unemployment numbers, all that means is that a lot of people had their benefits run out.

Re:Unemployment rate? (1, Informative)

gklyber (5133) | more than 7 years ago | (#12901036)

The theory is that people that do not have a job and have reached the end of unemployment benefits should not count as unemployed. They should not count because they are in a class of people that either will not accept the jobs that are available or have no useful skills for the current market. Either way, they are not counted in unemployment because unemployment is more a measure of people that are likely to be useful in the workforce and are willing to fill a present economic need.

Re:Unemployment rate? (3, Informative)

daVinci1980 (73174) | more than 7 years ago | (#12901171)

No, that's absolutely not what the unemployment rate represents.

Unemployed persons (Current Population Survey)
Persons aged 16 years and older who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment sometime during the 4-week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.

(From the Bureau of Labor and Statistics Glossary [bls.gov] )

Reaching the end of your benefits has absolutely nothing to do with whether or not you are counted as unemployed. You are considered unemployed so long as you are not working but were available to work and have actively been seeking employment.

Unemployment rate theory (1)

JLavezzo (161308) | more than 7 years ago | (#12901179)

The flaw with this theory is that it doesn't distinguish between the unwilling to be employed and those for whom there are no jobs. It's possible that a locality will have done so poor a job bringing employment into their area and training those on unemployment for available jobs that someone willing to work is unemployed for longer than 26 weeks. Unemployment benefits are hardly enough to finance a relocation to where there is work for most people.

Re:Unemployment rate? (1)

zxnos (813588) | more than 7 years ago | (#12901078)

can you prove that assertion? for the unemployment number to fall, there still has to be less people loosing jobs or no one loosing a job, which is still a good thing. incidentally, i have known a number of people who intentionally dont get a job until their benefits run out.

Re:Unemployment rate? (2, Informative)

demaria (122790) | more than 7 years ago | (#12901082)

That is untrue. Unemployment is calculated based on a household survey of thousands of people, not the number of people on unemployment insurance.

This can be confirmed in wiki [wikipedia.org] and various gov [census.gov] sites.

Re:Unemployment rate? (0)

Anonymous Coward | more than 7 years ago | (#12901110)

Unemployment figures have nothing to do with who is receiving unemployment benefits; you're confusing it with the fact that people who aren't seeking work aren't counted in those figures. The BLS calculates the numbers from a phone survey, not from benefits.

Re:Unemployment rate? (0)

Anonymous Coward | more than 7 years ago | (#12901190)

On the contrary, both of you are wrong. Unemployment figures are derived from large-scale surveys, not from how many people collect unemployment checks.

Re:Unemployment rate? (1)

Andrew Cady (115471) | more than 7 years ago | (#12901210)

I wonder how much this kind of fraud contributes to artificially(?) raising the unemployment rate. Maybe it's quite a bit lower than the reported rate due to the fraud?
The unemployment rate is not calculated by tallying the number of people collecting unemployment, though this is a commonly-repeated media myth. See snopes.com.

The confusion is this: the definition of "unemployment" is the same as that used by the unemployment benefits system -- but it measures both those who do not collect, and those whose benefits have expired but still meet the definition. This does lead to underreporting of the unemployment rate, as is commonly stated in the media, but not exactly for the over-simplified reason that they just use unemployment collection rates to determine the figure.

Check for actual unemployment? (5, Insightful)

moz25 (262020) | more than 7 years ago | (#12900908)

To which extent do they actually check that the person is in fact unemployed? Certainly, a person-to-person talk should take place before they hand over money just like that? Perhaps this is a bigger problem in their system as identity theft appears to be one of many ways to exploit that system.

Re:Check for actual unemployment? (1)

Urania (874567) | more than 7 years ago | (#12900945)

I suspect that anyone involved in identity theft would have no problem fibbing their way through a face-to-face interview. In fact, they might actually *be* unemployed, or at least w/o legal employment--why get a day job when you make this much ripping everyone else off?

Re:Check for actual unemployment? (1)

raider_red (156642) | more than 7 years ago | (#12901165)

I don't think the same person would be able to show up fifty different times without someone at the office recognizing him. The problem is when you have a system like the one here in Texas, where all claims are done by internet and phone. We do have required classes though, but those usually only kick in on your 2nd month.

Re:Check for actual unemployment? (4, Interesting)

Kohath (38547) | more than 7 years ago | (#12900959)

They should just privatize the system. It's insurance. Does an insurance company just hand over money without checking to see if the claim is legit?

Re:Check for actual unemployment? (1)

Spodlink05 (850651) | more than 7 years ago | (#12901074)

They should just privatize the system. It's insurance. Does an insurance company just hand over money without checking to see if the claim is legit?

Privatising it would change this how exactly? Other than siphoning off a lot of money for profit that would normally go to the unemployed who need it.

I always go by the rule that the problem reported is inversely proportional in size to the coverage it gets. Unemployment fraud is a very minor problem, especially compared to corporate fraud. But corporate fraud involves taking on rich people, it's much easier to go after poor people who can't fight back.

Re:Check for actual unemployment? (1)

JanneM (7445) | more than 7 years ago | (#12901102)

Yes, private systems sure is making US health system way better than the state-run systems in Europe.

I sure hope US soon privatises their army; that will show everybody!!!

Re:Check for actual unemployment? (4, Insightful)

Kintanon (65528) | more than 7 years ago | (#12901096)

I don't see how this kind of fraud is even possible. In Georgia in order to receive unemployment benefits you have to have been laid off, which they verify with your employer, or have a letter of seperation from your employer, and the employer has to not dispute the unemployment claim. Then you have to provide weekly updates to the unemployment office or they stop sending you money. In addition you had to have made at least a certain amount of money during the period you were employed in order to qualify, also verified with your employer and with your tax records.
So really, I'd LOVE to know how this is done, because I couldn't even get legitimate unemployment when I was out of work.

Kintanon

Re:Check for actual unemployment? (2, Funny)

savagedome (742194) | more than 7 years ago | (#12901098)

[New York State Department of Labor]
MRS. SOKOL: You know you only have two more weeks before your benefits run out.
GEORGE: Yes and I was hoping ... to get a thirteen week extension.
MRS. SOKOL: So where have you been looking for work?
GEORGE: Well you know what I've discovered Mrs. Sokol. It's not so much the looking as the listening. I listen for work. And as I'm looking and listening I am also looking. You can't discount looking. It's sort of a combination. It's looking, and listening, listening and looking. But you must look.
MRS. SOKOL: Can you be specific about any of these companies?
GEORGE: Specific, Ah, lets see. I've walked in and out of so many buildings they all .. blend in together, I uh, ..
MRS. SOKOL: Well just give me one name.
GEORGE: Absolutely, uh, lets see there's, uh, Vandaley Industries, I just saw them. I got very close there. very close.
MRS. SOKOL: And what type of company is that?
GEORGE: Latex, latex manufacturing
MRS. SOKOL: And you interviewed there?
GEORGE: Yes, for a sales position. Latex salesman, the selling of latex, and latex related products. They just wouldn't give me a chance.
MRS. SOKOL: I'm going to need an address and a phone number for this uh, Vandaley company...
GOERGE: You like gum? 'Cause I have a friend in the gum business. I got a gum guy. I make one phone call. I got boxes of delivered right to your door.
MRS. SOKOL: The address!
GEORGE: YYYDDSSHE(?) ... Jose Jimenez. You recognize it?
MRS. SOKOL: No.
GEORGE: Jose Jimenez, ... verrry funny. ..very funny.
MRS. SOKOL: The ADDRESS!
GEORGE: uh, Uh, Vandaley Industries, is uh. 129 West 81st street. It's a very small industry Vandaley. It's one of the reasons I wanted to uh, work for them.
MRS. SOKOL: The PHONE number.
GEORGE: That's uh, KL5-8383. Are you calling them soon because, they keep very strange hours.
MRS. SOKOL: As soon as I'm done wit you!
GEORGE: Sure, well uh, you know I'll check in with you next week uh, I gotta run now because I got a full plate this afternoon. All right, really go to uh,.
[George runs down hall]

Stupid Me (0)

Anonymous Coward | more than 7 years ago | (#12900927)

After my unemployment benefits ran out I should have reapplied using someone else's identity.

Does anyone care anymore? (0)

Anonymous Coward | more than 7 years ago | (#12900931)

Seriously. Why shouldn't we cheat and steal when everyone else does it in varying degrees and gets away with it?

Western society has become a culture of cheating. All that matters anymore is how skilled you are at doing it so you can get away with it. There is no turning back.

Re:Does anyone care anymore? (0)

Anonymous Coward | more than 7 years ago | (#12901044)

Seriously. Why shouldn't we cheat and steal when everyone else does it in varying degrees and gets away with it?

That's your choice. But as you said, most of us do cheat and steal. We download warez, don't say anything when we get too much change back, don't report all of our income on tax day, buy something and use it for a week then return it for full refund, etc.

Western society has become a culture of cheating.

When wasn't it? And not just Western society, but the entire world. It's human nature, we want to get everything with as little effort as possible. If anything, Western society has fewer cheaters than ever before. It's a prosperous society, so most people can get what they need legitimately. Of course, there are always exceptions...

Re:Does anyone care anymore? (1)

MysteriousPreacher (702266) | more than 7 years ago | (#12901183)

We could try but it wouldn't be a stable strategy [wikipedia.org]

Kind of like imagining what it would be like if all couples in the world decided to not bother with the hassle of having kids. Sooner or later, the system itself will collapse and everyone would lose the benefit they used to get from it. Seems that unfortunately, the decent majority just have to bite the bullet and live with the fact that there will always be people who want to cheat their way through lives.

Of course, this doesn't mean that we shouldn't try to stop the cheats.

And the states are making it easy (-1, Troll)

WindBourne (631190) | more than 7 years ago | (#12900942)

Here in colorado, Our current gov. created a new system that is horribly broken. Apparently the scuttle butt inside the project is that it is a major joke. They have taken a number of systems that worked and simply moved it to one system with fewer safeguards, and it does not work.

Ah, but are they really thieves? (5, Funny)

Anonymous Coward | more than 7 years ago | (#12900950)

They are only copying someone's identity after all. The original person still has their identity, so it can't be considered "theft" :D

Re:Ah, but are they really thieves? (1)

richdun (672214) | more than 7 years ago | (#12901224)

Heh, so can we use the same argument for "copying" copyrighted works, since many brand that as "stealing"?

Tough to make crime pay much better than that? (1)

lbmouse (473316) | more than 7 years ago | (#12900957)

1. Steal social security numbers
2. ?
3. Profit!
4. Get caught
5. Spend the next 5-10 years defending your corn hole

No one gets fired and we never get accountability (1, Insightful)

Anonymous Coward | more than 7 years ago | (#12900958)

Its not like its their money. Until government civil servents can be fired instead of collecting big fat pensions, we will NEVER get any changes from the government.

MOD DOWN TROLL (0)

Anonymous Coward | more than 7 years ago | (#12901020)

that's the most sickening picture I've ever seen. you sick fuck!

Re:this is giopatsex (0)

Anonymous Coward | more than 7 years ago | (#12901055)

Trolls, you are seriously disappointing me. Goat.cx is not a shock site anymore! Update your damned bookmarks! Use the goatse.org mirror!

How do you expect us to be sucessfully trolled if you guys won't do your job right? I tell you, I'm losing my faith in Slashdot trolls.

Wait a minute... (1)

neenbeenbaby (893933) | more than 7 years ago | (#12900967)

So not only am I paying a bunch of money into the system for a benefit I am never going to receive, the money isn't even going to the people that it should be. Shame on you, stealing from my Grandma.

this sounds like much higher risk (0)

Anonymous Coward | more than 7 years ago | (#12900972)

you can receive $400 per week for 26 weeks

Well, is you have to receive checks for 26 weeks, it's much harder to stay ahead of the authorities. You (or an associate) have to pick up all the checks.

With most other fraud, you move quickly to avoid being tracked.

sorry, but where is the HOWTO file ? (3, Funny)

Adult film producer (866485) | more than 7 years ago | (#12900973)

I don't see it included in the story.. it sounds like such a great deal for those with initiative, I have to ask if this is illegal?

Re:sorry, but where is the HOWTO file ? (1)

ToadMan8 (521480) | more than 7 years ago | (#12901067)

I was totally gonna ask for a howto!! It has to have a whole section named "??????" followed by one named "Profit!" of course

Victims? (4, Insightful)

Peyna (14792) | more than 7 years ago | (#12900976)

When the author referred to the victims of this crime as being the government agencies and not the taxpayers, I stopped reading.

Re:Victims? (2, Insightful)

raider_red (156642) | more than 7 years ago | (#12901185)

The real victim is going to be the poor sap who gets laid off only to find someone already used up his unemployment insurance.

Sounds great! How do I play? (1)

Brento (26177) | more than 7 years ago | (#12900978)

So can I file for unemployment for myself, and then complain about identity theft and say I didn't get it?

Sounds like a free iPod a week for half a year! I'm up for that game. Where do I sign up?

Easy to catch? (2, Interesting)

kevin_conaway (585204) | more than 7 years ago | (#12900980)

Those checks have to be mailed or deposited somewhere right? Wouldn't it be fairly easy to catch these people "red handed" picking up their checks or depositing the checks in their account? What about withdrawing it? It all leaves a trace..

Re:Easy to catch? (2, Informative)

raider_red (156642) | more than 7 years ago | (#12901099)

All you need is a fake ID and a convenient local check cashing/payday loan place. All the anonymity required at a 10% fee.

Re:Easy to catch? (1)

alta (1263) | more than 7 years ago | (#12901113)

I wouldn't think so. I don't think it's discovered until LONG after the crime has been committed. If someone stole my social (922-56-8335) and then got all of my unemployment benefits, I would probably never notice, because I have no IDEA what benefits I have coming. I MIGHT find out years from now, but a crook who spent half a second think about what they were doing is not going to have the checks sent to their home address. They'd be smart to have each check sent to a different PO box. I think if I was a mailbox etc employee I'd notice 100 Gov checks coming to a single mailbox.

At that point I'd blackmail the thief for my cut.

Little harder than indicated... (3, Insightful)

It doesn't come easy (695416) | more than 7 years ago | (#12900986)

No doubt lots of fraud going on but simply having the SSAN isn't all you need. You would also need at least some employment history data.

Instead of another central database which conveniently aggregates all your personal information in one place, ripe for the hacking, what we need is a law passed that requires companies to remove the SSAN from their databases. All of them. The company can replace it with a unique identifier if they want but there is no reason for them to have the SSAN in the first place. Yes, I know it's the one number everyone remembers when someone is trying to identify you, but that is a poor reason for every database on the planet to contain such an important identifier. Let's develop a better way to authenticate someone, why don't we?

Quick?!? (3, Insightful)

A nonymous Coward (7548) | more than 7 years ago | (#12901007)

File a false unemployment claim and you can receive $400 per week for 26 weeks. Do it for 100 Social Security numbers and you've made a quick $1.04 million.

Quick? 26 weeks? Plus the start up overhead of several weeks?

Re:Quick?!? (1)

kryptx (894550) | more than 7 years ago | (#12901031)

You're right... any average Joe can make a million in 26 weeks.

Who are they kidding, anyway?

Re:Quick?!? (0)

Anonymous Coward | more than 7 years ago | (#12901065)

shit I don't even make $400 a week

Re:Quick?!? (1)

drjoe1e6 (461358) | more than 7 years ago | (#12901206)

Let's do a back-of-the-envelope calculation. If your job pays $50,000 a year, it takes 20 years to earn a million. Yup, 6 months plus a couple weeks overhead is quick!

UK perspective: easier to lie about circumstances (0)

Anonymous Coward | more than 7 years ago | (#12901011)

This was in the news recently in the UK. I think the no2id website has some stuff about it. Basically, there is far more social security fraud where people are honest about their identity but dishonest about their circumstances, e.g. they have a part-time job, not as many children, secret Swiss bank account etc. Using an entirely false identity makes up only a small fraction of the total fraud. The headline total fraud number is used to justify the idea of a national ID card, yet that would solve only this tiny part of the total problem.

Software probably can solve this (5, Insightful)

Jurph (16396) | more than 7 years ago | (#12901015)

It seems like it would be trivial to scan a database for recurring addresses -- sure, there might be four people in a two-bedroom apartment collecting unemployment. But fifty? A hundred? Send an investigator out to talk to anyone living at an address with more than (e.g.) six registered names. If nothing else, he can interview all six of the people and see if there's a systemic problem keeping them from getting work in an area.

Two things bother me about the article, however:

1) The person calling our attention to this problem is a software vendor. He runs a payroll software firm, and probably has some financial interest in fraud-detection software. If nothing else, his byline contains an advertisement for his company.

2) He doesn't really present any evidence for the problem other than hearsay from an official in Washington State. Neither of them presents any real numbers.

I think it's wise to prevent this problem, and shore up any weakness to this exploit that may exist, but it's also important to be sure that a problem exists before demanding that the state take action.

Re:Software probably can solve this (1)

Otter (3800) | more than 7 years ago | (#12901166)

2) He doesn't really present any evidence for the problem other than hearsay from an official in Washington State. Neither of them presents any real numbers.

If this problem were really widespread, wouldn't we be hearing story after story from people being denied unemployment benefits because someone had already filed in their name? I agree -- this is pretty fishy.

Also, while IANAIT, it seems to me that screwing with credit card companies is safer than ripping off governments. The companies are in the business of assuming risk, writing off losses and passing them along to customers. It's governments who can pursue you without having to worry about the cost/benefit of doing so.

Virginia knows who is employed (0)

Anonymous Coward | more than 7 years ago | (#12901018)

In Virginia employers are required to file quarterly reports to the Virginia Employment Commission. These reports include the SSN of all current employees.

It would seem simple to coordinate accross states.

Two places at once? (1)

JanneM (7445) | more than 7 years ago | (#12901027)

Hm, your social security number is irregular? Well, you're not an enemy combatant, nor a criminal. It's off to Diego Garcia with you, and if anyone - spouse, neighbour - wonders about you, there's room for them too.

abuse of SSN (1, Interesting)

cpotoso (606303) | more than 7 years ago | (#12901029)

A couple of months ago I signed up for internet through cable. In addition to having (for obvious reasons) my address and name, they also wanted my SSN and date of birth! Helloooooo!? Anyway, when I complained they said that it was a condition... So I responded with a random number for the SSN and DOB and nobody bothered to check... So why the HELL they wanted those numbers???

Advise for everyone: start using fake SSNs and DOBs whenever possible... Gee!

Re:abuse of SSN (1)

Poromenos1 (830658) | more than 7 years ago | (#12901105)

Isn't that illegal? What if the person whose number you used (although unlikely) shows up and sues you?

Re:abuse of SSN (0)

Anonymous Coward | more than 7 years ago | (#12901139)

So why the HELL they wanted those numbers???

So they can give them to the collection agency when you stop paying your bills. Of course it probably would cost them too much to check every number upfront, so they only check some or maybe none.

The problem with your approach is if everyone started giving fake info, then the compaines would start doing the checks and charging us some exorbintant fee. In the end our info is still being used improperly and we're being charged for it, great huh.

Your... (1)

EvilMonkeySlayer (826044) | more than 7 years ago | (#12901038)

Your social security number has been stolen.

Please send your name, address and social security number to socialsecurity@hotmail.com.

Your friends at the fraud office.

Quick? (3, Funny)

Poromenos1 (830658) | more than 7 years ago | (#12901045)

you've made a quick $1.04 million

Quick compared to what? Bank robbery?
  • Break into bank
  • Disable guard
  • Unlock safe with stolen code
  • Wait 26 weeks
  • PROFIT!!!

Airtight Security (3, Interesting)

dereference (875531) | more than 7 years ago | (#12901048)

FTFA:
An unemployment claim that is fraudulently made on a stolen Social Security number would be easier to detect if there were a national database of stolen Social Security numbers.

Right... Hacker target number one. Ah, but maybe they've thought of this.

Again FTFA:
If and when a database is created, the only caveat is that it must possess airtight security features.

Right... See, humans will be involved somewhere, and humans can be corrupted just as easily as databases (and perhaps more so). The database will have a lookup function or it's worthless. So who will get access? Only state unemployment offices? How about credit card companies (think MasterCard)? And won't banks want a piece of this, too?

But wait, there's more. What about employers? They certainly wouldn't want to hire somebody who is using a known stolen SSN. Ok, so employers get access. It wouldn't be fair if it weren't every employer, from massive multinationals to the mom-and-pop store on the corner. Every one of these organizations will have the ability to lookup information from this database.

FTFA one last time:
At the current time, this initiative isn't even being discussed in the halls of Congress

Let's just hope it stays that way.

I was unemployed (0)

Anonymous Coward | more than 7 years ago | (#12901088)

I was unemployed for a while here in Massachusetts. When I was unemployed, after a few weeks, they force you to go to a seminar to learn the effective ways to find a job and if you dont go, you're cut off. While I doubt that would stop many thieves, it certainly would become obvious if you show up to the same seminar week after week under different names. While this certainly isnt foolproof, it does help a little bit. Are there programs like this in other states which not only help the unemployed but could possibly reduce the fraud?

State dependent though (2, Interesting)

jav1231 (539129) | more than 7 years ago | (#12901100)

In my state, you unemployment is based on the last job you had (or jobs). They look at like the last 6 - 24 months or something. A company has the right to appeal as well. I'm not sure how one would defraud in this case. Joe Schmoe files against Acme Widget. Acme Widget says either a) He never worked here, b) wait, he still works here! (if say the phisher knew he worked there), or c) we don't think he's entitled.

ICFP Started!!! (0)

Anonymous Coward | more than 7 years ago | (#12901136)

Holly hell, ICFP has started. [plt-scheme.org]

Go team Perl GO.

how can it be that easy? (4, Informative)

MattW (97290) | more than 7 years ago | (#12901157)

In Texas, when someone files an unemployment claim, their employers within their "eligibility window" - ie, those they worked for the last X months (18? 24?) get notices. If their unemployment claim is granted (which requires they have been terminated not-for-cause, or that they quit for very specific few reasons, like harrassment), it is "debited" to the employer, and the employer's unemployment tax rate may go up as a result.

I can't imagine how they manage to file unemployment claims without the employers knowing and going to the person and saying, "What the heck? You're still employed." The jig would be up pretty quick. In Texas, the first phone interview includes a call to the employer(s) and takes place within days of the filing, probably before the first check is paid.

Since the unemployment fund is paid into through payroll deductions linked to the SSN, by the employer, I don't see how this could succeed, at least in Texas.

Cash (0)

Anonymous Coward | more than 7 years ago | (#12901167)

Well, you have to file a claim exactly when the person that you are filing as got laid off. *All* claims are verified by the state employees in unemployment insurance fraud division. This means a call to your former employer to ask for a termination date and reason. Also you have to show up for a personal interview with the program officer so you need a drivers license or a passport. And, if you try to file for someone eligible for unemployment benefts chances are he will file too so you will get caught.

I worked at the ** State Unemployment insurance for quite a few years. Fraud happens but with existing security measures it is not exactly easy to get a free unemployment check...

This sounds like a worst-case scenario to me. (2, Informative)

King_TJ (85913) | more than 7 years ago | (#12901168)

Maybe some states are more lax, but I know here in Missouri, there's no way you'd "easily get away" with this type of scam.

For starters, you're required to do an in-person reporting to your local unemployment office every 4 weeks. Until you do, your benefits cease, and not showing up for the in-person reporting after 2 weeks go by terminates your benefits.

Also, the maximum benefit amount they pay out in Missouri is $250 per week, not $400 like the figures used in the article.

To top it off, they also require that you apply for at least 3 jobs per week and keep a log of your contacts. True, they may or may not ever really look at this - but they reserve the right to. (I don't know exactly how that policy works, but I'm guessing maybe they randomly select people from the pool of benefits-seekers to come in and show them the log of contacts.) And in some cases, applicants for benefits are also required to go through other processes, such as spending time each week in their "resource room", using their computer database to job hunt.

Seems braindead to me. (1)

brunes69 (86786) | more than 7 years ago | (#12901170)

Your employer *has* to have your SSN, and the government *has* to know that your SSN is currently registered with X employer. THis is how the whole benefit system works.

If the government is not checking if an SSN is *already currently employed* when an unemployment claim is being filed, it is a result of pure incompetance. You would think this thing could be enforced with a foreign key constraint in the SSN claim database for god's sake.

Different names on checks? (1)

NightWulf (672561) | more than 7 years ago | (#12901186)

I can understand the underlying concept of the fraud, but your social security number is linked to your name, atleast in New York state. I can guess you can change the address to where the check is sent to, but it seems hard.

1)Most states won't send unemployment checks out of state without some extra paperwork, with more authorization.

2)The computers will most likely pick up the fact that 100 checks are being sent to the same address. I had an issue once when I was collecting unemployment at the same time my father was, living in the same house. They don't send checks to P.O. Boxes either, so you cannot setup 100 different addresses.

3)The name on the check will be the name of the of the unemployment recipient. Banks won't cash checks under different names without id. So now you're creating 100 fake id's, opening up bank accounts, and you have to go to 100 different banks, or you risk someone recognizing you cashign checks under different names.

Seems awfully risky to me, with a lot of variables that can go wrong. Probably easier to just rob the people when they cash their checks and leave the bank.

Propoganda (1)

m50d (797211) | more than 7 years ago | (#12901209)

Just trying to get you to accept identity cards, national database of everyone, etc.

If only the state knew if you were still employed (1)

ScrappyLaptop (733753) | more than 7 years ago | (#12901219)

1. The State administers the unemployment system.

2. The State administers the state income tax system and therefore knows if you are still employed.

Have I missed something?

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