Data breaches likely to blame for Kentucky, other states’ unemployment fraud cases

Data breaches likely to blame for Kentucky, other states’ unemployment fraud cases

LOUISVILLE, Ky. (WAVE) - Identity theft that led to unemployment fraud is happening across the country as well as in Kentucky and Indiana.

The Kentucky Attorney General’s Office is among several agencies investigating unemployment fraud.

“COVID has created a lot of loopholes, unfortunately, which is why we are seeing a lot of this fraud,” Lindsey Hix, the deputy director of senior protection for the Kentucky Attorney General’s Office, told WAVE 3 News.

Loopholes allow online transactions to take the place of those usually conducted in-person.

“A lot of banks allow you to open a bank account virtually now without any type of identification. So, as long as you have a name and a social security number that you can provide, you can open the account.”

That’s what happened to Louisville CPA Helen Cohen. She told WAVE 3 News the person who stole her social security number opened an account in Lebanon, Kentucky to try to get state unemployment funds through direct deposit.

Hix said the AG’s office alone has gotten more than 3,000 similar unemployment fraud claims since January and, there is no way to determine when and where identities were stolen.

“It could be a credit card breach from years ago, insurance providers, or healthcare companies,” Hix said.

Those caught in an old breach, like those at Equifax and Anthem, could just now be finding their information being sold on the dark web to cyber criminals who saw the pandemic as a great opportunity.

“We’ve had many victims call and say that we are the fourth or fifth state where they are the victim of unemployment fraud,” Hix said.

That was true for Republican State Senator Whitney Westerfield; he told WAVE 3 News about his unemployment fraud case in Kentucky and another state.

“Pennsylvania — apparently I’m entitled to pandemic assistance up there too,” he said holding a letter from Pennsylvania unemployment officials.

New mail shows new fraud.

“This one came complete with a nice check card,” he said holding it up, “so, that’s frightening.”

The United States Labor Department launched a website for people whose stolen information was used by fraud to claim unemployment at dol.gov/fraud.

In Kentucky, Hix said besides freezing a victim’s credit, a fraud claim can be filed with Kentucky Unemployment at kcc.ky.gov/career and the Attorney General’s Office at ag.ky.gov/identity-theft.

A police report can also be filed and reported online with other agencies like the Federal Bureau of Investigations.

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