Want to report Kentucky unemployment fraud from a stolen ID? Hold please. For hours.
James Farthing received a notice in late January that someone had used his identity to file a claim for unemployment insurance.
The Lexington resident tried several times the first week in February to report the fraud by calling a hotline noted on Kentucky’s unemployment insurance website.
He was repeatedly met with a message that said: Due to high call volume, please call back later.
He sent an email. He got no response. Worried the department had processed the fraudulent claim, he tried on Feb. 9 to call the unemployment insurance hotline and was determined to stay on the line until he could get a person.
It was a more than two-hour ordeal.
“I was actually put in a phone queue,” Farthing said of his first attempt at 8 a.m. that day. “I thought, ‘Wow, that’s progress.’”
But then he was informed the average wait time to speak to someone was two hours.
Farthing dug in. Every time the automated message asked if he would prefer to stay on the line or get a return call, Farthing requested to stay on the line.
But at 8:45 a.m. Fathering decided to enter his number for a return call. He had things to do.
“I receive a message that there is a problem with my call back number; please wait for the next available agent,” Farthing said.
With the hope that he would eventually be able to speak to someone, Farthing stayed on the line until 10:45 a.m., nearly two hours and 45 minutes after he first started. He eventually had to hang up.
Despite repeated emails and attempts to call the fraud hotline over weeks, Farthing said this week that he has yet to receive confirmation from unemployment insurance that the bogus claim filed under his name was stopped.
“I really, truly feel for those that are in need of UI assistance due to job loss as the system appears to be totally broken,” Farthing said.
Kentucky overrun with bogus claims
The state’s antiquated and underfunded unemployment insurance program has been hit with a deluge of fraudulent claims since the beginning of the coronavirus pandemic, state officials have repeatedly said.
In January, state unemployment officials estimated that of the 90,000 pending unemployment insurance claims, as many as 60,000 could be fraudulent.
But just as the system has struggled to process legitimate claims, it cannot keep up with reports of possible fraudulent claims.
Patricia White, who lives in Colorado, received notification that someone had filed a bogus unemployment claim in her name in Kentucky. White has never lived or worked in Kentucky. She emailed the state unemployment insurance line. She tried to call the fraud hotline multiple times since early February.
“I’ve tried calling the phone number every day since then, and it is always the ‘we are experiencing high call volumes’ and there is no option to speak to a person (or any options) and it hangs up on you,” White said in an email.
Bruce Masterson lives in Rhode Island. Masterson was notified recently that someone had tried to file a fraudulent claim using his information in Kentucky. He even faxed the state to dispute the claim. His emails have also gone unanswered, he said in an email.
Worse, fraudsters have also filed for unemployment in his name in Rhode Island. He’s trying to fight those claims too, but he works full time and can’t be on the phone waiting for someone to answer the phone, he said.
“What amazes me is that there was a claim in Kentucky,” Masterson wrote in an email. “I have never been a Kentucky resident or been employed in KY.”
KY launches new online fraud reporting form
Kevin Kinnaird, a spokesman for the Labor Cabinet, did not answer questions on whether the unemployment insurance hotline was staffed. The Kentucky Office of Unemployment Insurance was moved to the Labor Cabinet last year after repeated problems with the system.
Kinnaird said the state launched a new online form so people can report fraudulent claims. To find out more about the new form, go to https://kcc.ky.gov/career/Pages/UI%20Fraud.aspx. The fraud hotline number has now been removed from the unemployment insurance website.
“The new form will ask individuals to provide necessary information so that our staff can successfully investigate claims as quickly and as efficiently as possible,” Kinnaird said. “At the same time, we will also update our web page dedicated to UI fraud on the Kentucky Career Center website with additional information where people can get assistance and access resources to better protect themselves.”
Weeding out the bogus claims is hampering the state’s ability to get legitimate claims processed, Kinnaird said.
The state has not said how many fraudulent claims are under investigation or if there has been a determination on how many fraudulent claims have been paid out. The proliferation of identity theft has helped would-be thieves file bogus claims across the country.
The U.S. Labor Department inspector general’s office estimates that more than $63 billion has been paid out improperly through fraud or errors since March, according to the Associated Press.
In California alone, state officials believe more than $11 billion in fraudulent claims have been processed.
But there is good news for Masterson and White and anyone from out of state who believes their identity information has been stolen to file claims in Kentucky. The state has recently put a stop to any out-of-state claims.
“We have recently put measures in place to cut down the number of fraudulent claims. All out-of-state Pandemic Unemployment Assistance (PUA) claims have a stop on them until they can be verified,” Kinnaird said. “ A stop on the claim prevents it from proceeding further in the approval process. “
The office is also launching additional fraud protections to make sure bogus claims don’t get through, he said.
“If someone receives a notice of determination, or their employer receives a notice of a claim being filed, it does not mean that money is being paid on the claim,” Kinnaird said. “The notice only states the amount of benefits a claimant is due to receive should the identity associated with that claim become verified and all other federal eligibility requirements are met.”
What to do if your identity is stolen to get benefits
But it’s also important for people to notify other entities if they believe someone has stolen identity information to get benefits, according to the Kentucky unemployment office website.
The state recommends that if you think someone has filed an unemployment claim in your name — for example, you received a 1099-G form that indicates you received unemployment insurance benefits without ever filing — report the identity theft fraud to all of the following entities:
- the Office of Unemployment Insurance by clicking (https://secure.kentucky.gov/FormServices/UI/Fraud)
- Your employer
- File a police report with your local police department. Obtain a copy of the report to provide to creditors and credit agencies.
- File a complaint with the National Center for Disaster Fraud.
- Report identity theft to the Federal Trade Commission (FTC).
The IRS offers the following advice if someone receives a 1099-G for unemployment benefits they did not receive:
Taxpayers who receive an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits.
Taxpayers who are unable to obtain a timely, corrected form from states should still file an accurate tax return, reporting only the income they received. A corrected Form 1099-G showing zero unemployment benefits in cases of identity theft will help taxpayers avoid being hit with an unexpected federal tax bill for unreported income.
Taxpayers do not need to file a Form 14039, Identity Theft Affidavit, with the IRS regarding an incorrect Form 1099-G. The identity theft affidavit should be filed only if the taxpayer’s e-filed return is rejected because a return using the same Social Security number already has been filed.
The Kentucky Office of Unemployment Insurance also recommends the following:
Equifax: 800-349-9960 orhttps://www.equifax.com/personal/
Experian: 888-397-3742 or https://www.experian.com/
TransUnion: 888-909-8872 or https://www.transunion.com/
This story was originally published March 2, 2021 at 7:46 AM.
