State Alerts Credit Unions of Unemployment Fraud Attempts

Financial institutions, both in Michigan and around the country, are seeing a sharp increase in unemployment insurance fraud. This fraudulent activity may come in various forms but often from out-of-state ACH transactions. 

Here’s an example of typical activity: a member is recruited online by a perpetrator and paid a fee for allowing the perpetrator to use the member’s account to deposit fraudulent funds from another state and then the member is asked to withdraw the funds and wire to the perpetrator from another financial institution. 

DIFS has contacted all Michigan credit unions strongly advising increased scrutiny of ACH transactions, especially those outside normal activity for member accounts. 

Other schemes and attacks have also been reported. The U.S. Department of Labor Office of Inspector General has discovered that scammers are sending emails in an effort to steal legitimate claimants’ passwords, account numbers and/or Social Security numbers. With this information, they can gain access to email, bank or other accounts. 

An alert issued by the U.S. Secret Service explained an international crime ring is exploiting the COVID-19 crisis by committing large-scale fraud against multiple state unemployment insurance programs, with potential losses in the hundreds of millions of dollars. Other fraudsters are preying on the general public through romantic interests and monetary schemes where they obtain PII from individuals in an effort to file fraudulent claims and obtain account information. 

If your credit union uncovers these types of fraudulent ACH payments or schemes, please report a fraud complaint with the Michigan Unemployment Insurance Agency (UIA) here. 

All fraud complaints should be filed using the Michigan UIA form, even those involving other states. The UIA will refer any necessary information to state and federal authorities. Credit Unions are also encouraged to reach out the Michigan State Police directly to provide information related to suspected unemployment insurance fraud, including confidential data, by contacting Detective First Lieutenant Denise Powell.

In addition to filing unemployment fraud reports as detailed, also notify DIFS of these fraud issues. Summary notifications should be sent via email at DIFS-OCU@michigan.gov.