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January 23rd, 2026
During the pandemic, the U.S. economy may have crashed worse than it did during The Great Depression had the federal government not offered robust financial assistance during COVID-19 through the CARES Act. Programs like unemployment insurance and the Paycheck Protection Program helped us stem the tide. Unfortunately, during the pandemic cyberattacks and online scams of all kinds reached record levels and substantial amounts of money may not have reached the intended targets. Instead, they ended up in the hands of scammers through various scams that have tricked the nation during this difficult time.
FBI, Secret Service, and State Governments Report Unprecedented Fraud
A recent report from Axios estimates that 50% of unemployment claims totaling $400 billion may have been paid to criminal scammers. While the government is still investigating and hasn’t confirmed the total amount of unemployment fraud paid to scammers, it has acknowledged and warned that we are under attack. Anyone could be vulnerable to online scams and is at risk of having their unemployment claims stolen.
The FBI has warned everyone about how scammers were stealing identities to claim unemployment insurance. The Secret Service announced it had recovered $2 billion worth of fraud and returned it to state unemployment agencies. Moreover, all 50 states have reported fraudulent claims far beyond what is typical pre-pandemic times.
This level of fraud – unprecedented in American history – has severe consequences. First, American families in need, many of whom spent hours on food lines, may not have received the money they needed. Second, Americans who were fortunate to earn income may have seen their hard-earned taxes paid to international criminals and not their fellow struggling Americans.
In addition, America has been under siege from international criminals using Ransomware attacks like the one that shut down the Colonial Oil Pipeline and led to a gas shortage and price hikes. FBI Director Christopher Wray sounded the alarm by comparing these cyberattacks to the challenges we faced with 9/11.
Unemployment Fraud By State
At Social Catfish, we created a graph for you based on the top unemployment rates of the nation. We wanted to showcase the highest rates of unemployment since it most likely correlates with the amount of fraud across the nation. The top 5 states with the highest unemployment rates were Hawaii, California, New York, New Mexico, and Connecticut. The lowest 5 states with the least amount of unemployment rates were Vermont, Utah, South Dakota, New Hampshire, and Nebraska.
California: The state reported $11 billion in fraudulent claims had been paid and an additional $19 billion was being investigated for fraud. The Sacramento District Attorney estimated in April more than $20 billion was paid to scammers.
Colorado: Colorado’s Department of Labor and Employment found 43,000 claims totaling $19.4 million have been paid to criminals. However, the agency is investigating more than a million claims suspected to be fraudulent. This is up from 90 fraudulent claims found in 2019.
Ohio: The Department of Job and Family Services identified $330 million in fraudulent payments.
Maryland: This identified nearly 300,000 fraudulent claims that were paid and announced it had uncovered a large and sophisticated criminal enterprise and stopped $500 million in fraudulent claims.
Washington: In 2020, Washington called in the National Guard to help them review a crush of fraudulent requests. Washington State Auditor’s Office reported in April that $647 million in illegitimate claims were paid in 2020.
How Do Scammers Steal Unemployment Claims?
Scammers are able to steal unemployment claims through lies, deception, and catfishing. They create fake profiles on social media or dating apps and create different types of scams that trick their victims out of their earned unemployment benefits. They also create fake personas over the phone and send phishing emails or text messages to their victims that also trick them out of their money.
Here are the top scams that you need to watch out for:
Identity Theft
Scammers steal the personal information of their victims, such as their full names, birthdays, addresses, and even social security numbers. Then, they apply for unemployment benefits under their victims’ names. They lie and state they aren’t working and request to send information to a different address so that the victim will never know what’s going on.
Scammers can get away with this scam for months before victims notice something is going on. Usually, victims don’t know that scammers targeted their information for this scam until they receive something in the mail stating that they owe a bunch of money. They also receive less than they are used to on their tax returns since the government thinks they are collecting unemployment.
Victims can report this scam to identitytheft.gov in order to help reverse some of the damages. According to IdentityTheft.gov, you should freeze your credit and file your tax returns if you suspect that you have been a victim of an identity theft unemployment scam.
Romance Scams
Scammers create fake profiles on dating apps and social media sites then add random people to these networks. They start conversing with people, making them feel special and feel like they are the only ones for them. They develop romantic relationships with their victims and act as if they care about who they are talking to. This gains the victims’ trust and makes them feel like nothing could go wrong in their relationship.
That’s when scammers sense that victims would help them with any emergency that comes their way. They see that their victims trust them and know that they wouldn’t question if an emergency came up that required financial help. That’s when scammers make up a fake jab or health emergency that scares their victims into thinking their well-being is on the line without money.
They pay the requested money to make sure their scammer is okay, but the requests for money don’t stop after that. They make sure every penny is drained out of their victims’ bank accounts before they stop asking for money. There have been many reports where victims gave away all their stimulus checks and unemployment funds to their romance scammers.
Spoofing Scams
In spoofing scams, scammers create VOIP phone numbers and choose the state that they want their call to come from. They then mask their Caller ID to make it seem like they are a bank or a reliable business that victims can trust and rely on.
There have been many times where scammers have spoofed their Caller ID to make it look like they are calling from the unemployment office. They call their victims and state that they need to verify their identity and pay a small fee to continue to receive unemployment benefits.
Out of fear, victims send over any personal information they have as well as their financial information so that they can continue to receive their benefits. Scammers take this information to commit identity theft and drain their bank accounts.
Investment Fraud
Scammers create fake investment opportunity posts on social media that promise their victims a lot of money if they sign up. They also create phishing links via email and messaging that advertise these investment opportunities to their potential victims. As they are advertising these opportunities, they make it sound like there is little risk involved with a guarantee that you’ll be able to triple your money.
Since people are receiving unemployment bonuses, they think that it’s a good idea to invest their money. They figure that since social media users are guaranteeing to triple their money, they should invest in these opportunities since they have the money to do so. They invest their unemployment funds into these opportunities since they feel like it’s safe to do so.
However, once you send over your hard-earned money, there’s a 99% chance that you will never see a penny of it again. They usually have their victims invest via Bitcoin, gift cards, or wire transfer so that it’s harder to trace their money back and get it back.
Extortion Scams
Scammers create fake profiles using girls’ explicit images from OnlyFans or Snapchat. They target guys on dating apps that are looking to “get lucky” with another girl on the dating app. The girl lures the guy to texting, claiming that she doesn’t like using the app to text.
As they are texting, the girl sends photos of herself and encourages the guy to do the same. The guy sends her explicit photos, which then gives the girl leverage for blackmail. The girl threatens the victim and claims that if he doesn’t send her money that his explicit photos will be sent to his family members, friends, and the rest of the Internet.
The guy gets scared and sends her money to avoid this, but she continues to beg for more. He continues to send more money, since he is getting an unemployment bonus due to the pandemic, and thinks that he has enough to buy himself out of this. However, no amount of money he sends will ever be good enough for her. She will continue to ask for his unemployment funds until he goes bankrupt.
There is also a minor version of this scam, where the girl claims she is sixteen and her supposed father gets involved. The fake father claims that if you don’t send money that he would file charges to the police and send them after you, which isn’t true.
How to Avoid Scammers Who Are After Your Unemployment Claims
- Don’t send money or personal information to anyone that you meet online.
- Make sure to meet someone over video chat or in-person before starting a serious relationship with them.
- Don’t fall for investment opportunities that claim there’s little risk or a lot of money to be made.
- Don’t send or receive explicit photos from anyone that you don’t know online.
- Don’t give out information over the phone if someone calls you asking for it.
- Call a company back if they ask for information to verify that it’s actually them.
Social Catfish is Here to Help You!
At Social Catfish, we want to help you verify the identities of those who might seem suspicious to you. If you have their name, email address, phone number, social media username, or image, you can reverse search and see who the suspected person was that you’ve been in contact with to avoid being scammed out of an unemployment claim. If you were involved in a scam, make sure to report it to the FTC as well.
