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Fraudsters attempted to swindle hundreds of millions from the California Employment Development Department (EDD) in unemployment insurance benefits using paper and fax applications. 

This latest scheme involved fraudsters flooding EDD with as many as 47,000 potentially fraudulent claims earlier this month worth up to $560 million. The department announced it blocked the fraud attempt and is now mailing notices to all paper and fax claimants to separate the fraud attempts from legitimate claims before benefits are paid. 

Any legitimate claimant who receives an EDD notice should respond with the requested verification right away, the department said. 

 “EDD’s tough new fraud filters thwart a constant stream of new fraud attempts, schemes, and criminal tactics,” said EDD Fraud Special Counsel McGregor Scott. “These criminals again tried to pierce the Department’s defenses but we stopped them dead in their tracks,” Scott added.

The department said it normally expects to receive roughly seven thousand such applications in that time frame. This attempt “ will likely slow claims for some paper-filing claimants as EDD separates the fraud attempts from legitimate claims,” the EDD said in a press release. 

According to the department, some Californians may receive multiple notices from EDD if a scammer tried to file multiple claims in their name.

“EDD encourages Californians to stay vigilant against scam attacks. Scammers attempt to get personal information in many sophisticated and creative ways,” the EDD said in a press release. 

Scammers may “phish” victims by pretending to be banks, stores, or even government agencies. According to the department, they do this over the phone, in e-mails, by text message, in the regular mail, and by other communications forms. Once scammers have stolen this information they may attempt to file false benefit claims. 

The department said it implemented safeguards in 2020 in response to the “unprecedented increase in fraudulent unemployment claims related to the COVID-19 pandemic”. Those safeguards include identity verification through and cross-checking applications against law enforcement databases from Thomson Reuters.  

Anti-fraud measures blacked an estimated $125 billion in unemployment fraud attempts during the pandemic, the EDD reported. 

“Criminals will probe for weakness every day of the year, and EDD will keep blocking them,” said Scott. “EDD will continue to strengthen its fraud-fighting capability and remind Californians to guard against identity theft.” 

Californians who suspect fraudulent activity, including those receiving mailed EDD notices and did not apply for benefits, should report the fraud as indicated on the mailed notice and call 1-866-401-2849 for assistance. Californians can also report benefits fraud by visiting Report Fraud in Ask EDD. EDD has additional resources to help identity theft victims on the Help Fight Fraud web-page.  

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