Alabama Dept. of Labor receives around 30,000 fake unemployment claim reports

Fraud Alert: Fake unemployment claims
Fraud Alert: Fake unemployment claims
Updated: Apr. 22, 2021 at 11:01 PM CDT
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HUNTSVILLE, Ala. (WAFF) - We’re on your side with an update on an unemployment scam hitting many in Alabama.

Turns out, it’s even bigger than we first thought.

Businesses and employees are being targeted, with scammers using real names to file unemployment claims and steal money.

Tax accountant Ricky Young from Russellville received a letter from the Alabama Department of Labor, confirming an unemployment claim for an employee who has never worked at his company.

It turns out, Young is one of nearly 30,000 people who have reported similar fake claims.


“So many people are saying, ‘hey this is happening to me. What’s the next step, what do I need to do,’” Young said.

“We’re working with the U.S. Department of Labor, office inspector general, we’re working with the FBI,” Tara Hutchison, communications director for the Alabama Department of Labor said.

Tara Hutchison says the goal is to prosecute the scammers responsible.

“The scammers that are perpetuating these types of acts are highly sophisticated. In many cases, especially the ones where we’re seeing hundreds of claims filed against a particular business,” she explained.

Some good news, Hutchison says the majority of these scammers aren’t actually cashing in.

“Nine times out of ten our system catches those claims and flags them as fraudulent before any action can be taken on those claims before any payments are made,” Hutchison said.

And once the fraud claim is reported, the employee or a business is protected.

“Employers will not see their tax rates increase, they won’t be responsible for any benefits paid if they are paid to a fraudulent claim, and tax payers are not going to be liable for any kind of tax liability related to that unemployment,” she said.

If you’ve been impacted here’s what to do:

Report it on the Alabama Department of Labor website, contact credit bureaus to protect your credit, and file an identity theft report with your local police station.

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