Connecticut Employers See Uptick in Fraudulent Unemployment Claims

“This is not true. This is fraudulent,” said Richard Milluzzo, with Milluzzo & Company, P.C. Certified Public Accountants.

In his 30 years of business in Newington, Milluzzo has never laid off one employee, but on Thursday, he received a claim from the Connecticut Department of Labor, stating a 15-year employee, who is still employed, had filed for unemployment.

“It says that my employee on July 5th filed the claim, which is the same day that ReEmploy CT went live with their system,” Milluzzo said.

“These claims, they look legitimate. The employee’s names are spelled appropriately, they are applying to their current job and they're using the employee's social security number, which is pretty scary,” said Eric Gjede, Vice President of Public Policy for the Connecticut Business & Industry Association.

Gjede says the CBIA is now warning Connecticut employers to be on the lookout for fraudulent unemployment claims.

“We have a good relationship with a couple of third-party unemployment compensation administrators, and I was speaking to one this morning who said he had reviewed about 400 to 500 cases since Sunday and about 38% of those were fraudulent, so that's a pretty significant uptick,” Gjede said.

The Connecticut Department of Labor says the increase in fraudulent claims are not due to a breach of its newly updated unemployment claims system.

The agency released a statement to NBC Connecticut Friday:

“ReEmployCT is preventing unemployment fraud and overpayments. The system and the legacy system before it have always notified employers when unemployment claims are filed against that company. This is one of the first lines of defense against fraud and improper payments. The agency has always, and continues to urge employers to respond to those notices quickly. Delays in response can cause improper payment and non-fraud overpayments that people then need to pay back to the Department.

Improper claims are among the first fraud indicators and that an identity has been stolen. Once a criminal has stolen an identity, they try to open unemployment claims as well as bank and credit accounts. ID theft generally occurs after retail or commercial breaches or if people give out personal information online, on the phone, or by text. This information is available on the dark web for purchase so it’s important to change passwords often to render that information less useful to criminals. We have other recommendations on our Prevent Fraud webpage.

All states see imposter claims, new programs and services are often catalysts for increased criminal activity. In Connecticut, we have a robust system in ReEmployCT and multiple other fraud checks and crosschecks that help identify improper claims before they are paid. CTDOL is always prepared for imposter claims and has multiple checks in place to flag them and prevent payment.

There was a significant uptick in ID theft claims activity during the pandemic when the federal programs were in effect. During that timeframe, the agency stopped 115,000 fraud claims and protected $3 billion in funding.

And for a more recent example, when ReEmployCT launched just a few weeks ago, the agency saw an uptick in scammers trying to phish claimants on social media. We regularly remind filers that the only people who can assist them with a claim are Consumer Contact Center representatives—do NOT respond to offers for help on Twitter or Facebook.

The takeaway for individuals is to protect your confidential information to prevent ID theft. For the business community, respond quickly to the notices you receive from CTDOL and sign up for SIDES for even faster notification.”

Milluzzo says he hasn’t yet been able to reach the department to counter the claim. He’s now asking for an apology and accountability including credit counseling as he fears this case of fraud may not be resolved for good.

“This could have some long-term impacts to my employees and maybe my firm,” Milluzzo said.