Greg's Corner

California getting hit the hardest by unemployment scams

For months now, we’ve been discussing the historic amount of unemployment benefit scams that have been affecting each and every state. If reports are to be believed, it seems that California has been hit the hardest of all when it comes to unemployment scams.

As we’ve mentioned before, both domestic and foreign criminal rings have been assailing the states’ unemployment systems with fraudulent claims. Because of the record number of people out of work because of the pandemic, scammers have taken it upon themselves to take advantage of the situation by filing false unemployment claims. Often the scammers use stolen identities they’ve obtained through large data breaches that have been sold on the dark web. Fraudulent benefits have been filed in the names of people who are both employed and unemployed.

Recently, California district attorneys have announced that over $1 billion in fraudulent benefits have been paid out by the state. However, the bank that handles the unemployment debit cards for California says that total is closer to the $2 billion range. Some reports say that 1 in 3 unemployment claims in California are fraudulent. The problem has gotten so bad that the bank handling unemployment benefits for California have even taken some benefits back from legitimate recipients in the name of fraud investigation. Many of these recipients have had little to no recourse in getting their benefits back.

If you live in California, you’re probably already aware of the situation. So if you live in any of the other 49 states, why should you care what happens to California? Well, when it comes to the larger states, as goes California so goes the country. It could be only a matter of time before we start seeing other states being ravaged by unemployment scammers like California is. Pennsylvania, Washington, and Massachusetts have already encountered massive unemployment fraud just not on the level of California yet.

While we’re not sure what the solution is to stop these scammers, if the states don’t get a handle on them soon, the nation could be headed to even larger economic problems.