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Verify: If you don't need one, you shouldn't create an unemployment account to prevent fraud

A viewer wrote in to our Verify team asking if he should make an unemployment account to prevent fraudulent claims under his SSN.

DENVER — With a rise in unemployment insurance claims associated with COVID-19, instances of fraud and identity theft have risen, too. But is there a way to stop identity theft before it happens?

A viewer named Mike wrote in asking if he should create an unemployment account, even if he doesn't need the benefits, to lock up his social security number.

Would this prevent anyone else from creating an account and getting benefits on their social security number fraudulently?

Our verify team looked into this

The Question

“I was told by folks that I should create an unemployment account even if I don't want/need benefits to lock up my SSN preventing anyone else from creating an account and getting benefits on my SSN fraudulently, is this a good idea?”

The Answer

No. Creating an unemployment account when you don’t need benefits can actually cause more issues down the road if you need unemployment benefits later on.

RELATED: 'We're now in the fraud business': More scam unemployment claims have been filed in Colorado than legit ones

What we found

Jessica Smith, Press Secretary of Colorado Department of Labor and Employment (CDLE) Division of Unemployment Insurance, said this is not a good idea.

“Creating an unemployment account when you don’t need one, will likely result in your employer reporting it as a fraudulent claim,” Smith said. “This means if that person really does need to file a claim in the future, it would create a host of issues with trying to receive payments because he would already be flagged for fraud.”

CDLE reports 1.1 million fraudulent claims have been filed since the pandemic began, compared to the 1,043,760 legit claims that have been filed and processed.

Over $6 million has been paid out to scammers.

According to CDLE, If you are eligible for benefits, payment will be deposited to an unemployment prepaid debit card, called a ReliaCard. For an extra measure to make sure it’s not fraudulent, CDLE said the card comes in a plain, white, windowed envelope with an Indianapolis, IN return address. The card is valid for three years.

RELATED: Colorado's new unemployment system is a success, says labor official; Not everyone agrees

There are other ways to prevent fraud:

  • Never give out personally identifiable information over the phone. 
  • CDLE will never contact you and ask for your social security number, bank account numbers, PIN, account passwords or other personal information.
  • If you have not filed a claim and receive a Reliacard debit card or other unemployment paperwork in the mail, report it to CDLE.

So we can verify, no you should not create an unemployment account if you don’t need one.

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