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Data breach causes unemployment fraud surge

By James Kinneen
Hometown Weekly Reporter

Looking at the Needham police log, it’s hard not to notice that all of a sudden one specific crime is taking over the community: unemployment fraud. There are a couple of reasons for this, but none of them involve anything unique to the town of Needham, its businesses, or its residents.

Starting in March, as part of the COVID stimulus package called the “CARES ACT,” it was announced that any employee receiving so much as a dollar in unemployment benefits would receive a weekly $600 bonus check from the Federal Government. Suddenly, according to a University of Chicago study, two out of every three laid-off workers were making more money from unemployment than they had from working. Unsurprisingly, the incentive to commit unemployment fraud rose.

But, according to Officer Joe O’Brien, there’s another factor causing the surge in these crimes. Somewhere, there was a data breach, likely at a private company, that is causing problems for everyone.    

“We’ve actually talked to the state unemployment, and they believe it’s all related to the Covid unemployment benefits. They also believe anybody who has had a fraudulent claim filed is the victim of an earlier data breach. They don’t know where or when, but its not from the state it’s from another data breach likely at a private company. These scammers are using COVID as an opportunity to steal funds from the state.”

The main way Needham PD gets involved in the crime is when a person gets a rejection letter from the unemployment office, at which point they are encouraged to reach out to the authorities.

“A person would get notified by the state that somebody filed a claim on their behalf, and they don’t qualify - most likely because they’re still employed. If they get a letter in the mail, they’re encouraged to file with the local police department, with the state on Mass.gov, and to notify the credit reporting bureaus to put either a freeze or an alert on their account. The hope for the scammer is that for some reason, the person does qualify, and they can beat them to the punch. If a person is laid off related to COVID, they’re trying to use any angle they can to get the money funneled out. They can provide bank account information that’s not even local, and it will be direct-deposited into an account. State and local governments are requesting our reports, so they can look for a trend. The trend might not be something that’s triggered by all the Needham incidents, but there may be similarities between the Needham incidents and something that’s happening all across the country they could find.”

Unlike "Nigerian prince schemes" or "secret shopper scams," there’s not anything a person would have done wrong to become an unemployment fraud victim. This means that, unlike other scams, there’s no particular age, background, or even occupation that’s being targeted. And, while it might seem like Needham is being hit especially hard by the crime, according to Officer O’Brien, it’s happening all over the state.

“It’s everywhere. I live in another town, and reading the local paper, they’re getting hit just as hard as us. We work with detectives from all the other towns on other criminal matters, and they’re getting hit just as hard, if not harder than we are. It’s all walks of life too - young, old, it’s everybody. Normally, unfortunately, it’s the elderly that fall prey to these types of scams, but this is just everybody. We’re getting flooded. We’re getting inundated, and we’re trying to help the state as best we can.”

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