When jobless benefits expanded during the pandemic, states experienced a surge in fraudulent unemployment claims filed by thieves using stolen identities.
Now, there’s another type of fraud to watch out for that’s targeting government agencies. Officials in California are reporting a rise in disability fraud. And here at Allstate Identity Protection, we’ve seen open cases involving false disability insurance claims double over the last two months.
If you get hit by a fraudulent claim and someone illegally receives funds in your name, rest easy — we work to resolve identity theft. However, we recommend everyone stay alert to disability fraud, and we’ve compiled a few ways you can do just that.
Here’s how to help keep an eye on this growing problem and monitor for claims made in your name.
What is disability fraud?
Government benefits fraud has become more common, and can slow the delivery of benefits to people in real need. One example of this is disability fraud, which happens when someone files forged paperwork with the government to illegally draw funds intended for people with disabilities.
Disability fraud can involve identity theft — like when a criminal uses stolen personal information to apply for disability benefits in someone else's name.
Since applications for disability benefits need to be certified by health professionals, these schemes can be complex, which in turn may make them hard to prevent. Scammers may need to create two false identities — one for the person applying for disability and another for the medical provider.
Impersonating individuals and doctors may be on the rise in part due to personal data that’s either accessible on the internet — such as addresses and medical schools — or exposed through data breaches.
Disability fraud is rising in California
In recent months, California’s Employment Development Department (EDD) has reported a rise in false claims for disability insurance.
State officials observed a “significant increase” in medical provider accounts listed on disability insurance claims. Upon further investigation, the EDD also found evidence of false claims filed on behalf of individuals using stolen identities and credentials.
The state has since suspended activity for 27,000 suspicious medical providers and identified 345,000 potentially fraudulent claims.
In addition, the EDD has taken steps to warn California residents about the issue, urging them to safeguard personal and financial information and be on the lookout for identity theft.
Take these steps to better protect yourself
Like many fraud types, disability fraud often involves the use of personal information that’s already been stolen or shared online. That’s why some common fraud prevention tactics, like freezing your credit, won’t help.
“The best thing you can do to protect yourself is to safeguard your personal information,” says Brian Stuart, Allstate Identity Protection Director of Customer Care. Here are a few best practices to keep in mind:
- Treat your personal information like a credit card number. Be mindful of who you share it with, online and in the physical world.
- Be cautious about “free” apps. Many online services collect huge amounts of data. If a company that has your information is breached, you could be at risk of identity theft.
- Be aware of common scams. If you know fraudsters may target you with phony telemarketing calls and phishing emails, you’ll have a leg up.
- Monitor your financial statements — especially if you’ve been a victim before. “If you’ve experienced fraud, your details may have already fallen into the wrong hands, so keep a close eye on your credit and financial accounts,” adds Stuart.
If you’re a fraud victim…
Unfortunately, even the best habits can’t completely protect against fraud. With that in mind, be alert for these signs that you may be the victim of disability fraud:
- You receive a letter related to disability benefits for which you did not apply
- Your employer informs you that someone has filed for disability in your name
If you think you’re a victim, here’s what to do next:
- If you’re employed, contact your human resources department; your company will need to work with the Social Security Administration to dispute the claim
- File an electronic report online with the Office of the Inspector General
- File a one-year fraud alert with all three of the credit bureaus
- File an affidavit with the Federal Trade Commission
The government requires individuals to report fraud directly. If you’re a member and you need more assistance, we’re here to help guide you through the process.
If you’re an employer…
If you’re an employer and you receive a disability insurance claim that you believe is fraudulent, you should:
- Inform your employee that someone is trying to take out disability benefits in their name
- Dispute the fraud on behalf of your employee by providing wage information to the Social Security Administration
- Reach out to your designated state agency to deny the disability claim