Banks Grappling with Rising Cases on Unemployment Fraud

Typically when someone files for unemployment benefits there is a one to two week waiting period to verify the claim; in times of crisis some corners need to be cut in order to serve the massive amount of people who found themselves unemployed through no fault of their own; fraudsters are taking advantage of people and the government as they try to steal money intended for people on unemployment; “What’s happened in this case, which is really why all of these scammers are jumping on the bandwagon of unemployment fraud, is most states want to get the money out as quickly as possible,” said Crane Hassold, Senior Director of Threat Research in Agari’s Cyber Intelligence Division, to American Banker. “And because of that, the validation that usually happens is not happening in some places or it’s happening retroactively.”; though prepaid cards have been the choice of fraudsters banks are now being inundated with account openings that turn out to be fake; banks should try to better educate their customers on the potential fraud schemes in the market and try to flag potential risks so a human can review; fraudsters are getting smarter by the minute and in times of crisis they become even more emboldened to act on vulnerable people. American Banker.

  • Todd Anderson

    Todd is the host of PitchIt: the fintech startups podcast, a weekly interview show featuring emerging fintech founders and leading venture capitalists. He is responsible for leading the content team which covers fintech through daily & weekly email newsletters, editorial, virtual events, and in-person conferences. He has been covering fintech, banking, and venture capital for more than 15 years, including speaking regularly at industry events.

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