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Understanding Employment Identity Theft & Its Consequences

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employment identity theft description

identity theftEmployment identity theft refers to the unlawful use of an individual’s details, including their Social Security number (SSN), name, and other identifying information, to obtain employment under pretenses. This form of identity theft can create significant issues for victims, ranging from financial complications to legal troubles. Understanding how this type of identity theft works and knowing how to protect yourself is essential for preventing and addressing potential issues.

Understanding employment identity theft

Employment identity theft happens when someone uses your details to secure a job in your name. This can involve using your SSN and other personal details to pass background checks and gain employment. Criminals often turn to this type of fraud if they face barriers to legitimate employment, such as a criminal record, lack of work authorization, or other issues.

The perpetrators of employment identity theft exploit their victim’s credentials to avoid detection and secure benefits and wages in their name. The fraudulent employee may file taxes, claim benefits, and even accumulate a work history under the victim’s identity, causing a host of problems for the true owner of the information.

How does employment identity theft usually occur?

Employment identity theft can occur through several methods:

  1. Stolen Personal Information: Criminals may steal your details through phishing attacks, data breaches, or by accessing physical documents like your Social Security card.
  2. Fake Job Applications: Thieves may use stolen information to apply for jobs. They often choose industries or positions that require less scrutiny or where background checks are less thorough.
  3. Fraudulent Documents: In some cases, fraudsters create fake documents or alter existing ones to appear legitimate during job applications.
  4. Information from Public Records: Personal details available through public records or social media can also be exploited to commit employment identity theft.

What are the signs you’re a victim of employment identity theft?

Identifying employment identity theft can be challenging, but several signs may indicate this type of fraud:

  1. Unexpected IRS Notices: Receiving W-2s or 1099s from employers you don’t recognize is a significant warning sign. These forms indicate that someone may be using your identity to earn wages.
  2. Social Security Benefits Issues: If you receive a notice from the Social Security Administration (SSA) about denied or adjusted benefits, or unexpected earnings, it may suggest that your identity is being used fraudulently.
  3. IRS Notices of Identity Theft: The IRS may send notices like CP01E, CP2000, or CP2057 if they detect discrepancies in your tax filings. These forms suggest that someone might be using your SSN for employment purposes.
  4. Duplicate SSN Errors: If your tax return is rejected because of a duplicate SSN, it may indicate that someone else has already filed a return using your SSN.
  5. Unsolicited EIN Assignments: Receiving an Employer Identification Number (EIN) you didn’t request could mean your identity has been used to apply for business-related purposes.
  6. SSN Monitoring Alerts: If your SSN monitoring service detects unauthorized activity or your SSN appears on the Dark Web, it might be used for employment fraud.
  7. Unexpected Unemployment Awards: Receiving an unemployment award notice for benefits you didn’t apply for can indicate that someone is using your identity to claim unemployment benefits.

What are the implications of employment identity theft?

The implications of employment identity theft can be severe and wide-ranging:

  1. Financial Burden: Victims may face unexpected tax liabilities if income earned by the fraudster is reported under their name. This may lead to a higher tax bill or penalties from the IRS.
  2. Legal Complications: The IRS might audit you to determine whether you’re a victim of identity theft or if there’s an issue with your tax filings. This process can be time-consuming and costly.
  3. Impact on Social Security Benefits: Your Social Security benefits could be affected if the income reported under your SSN appears higher than your actual earnings, potentially leading to reduced or revoked benefits.
  4. Credit and Employment Issues: Fraudulent activities using your SSN can damage your credit score. It can also impact future employment opportunities if the theft goes undetected or unresolved.

What can you do if you’re a victim of employment identity theft?

If you find out that you’ve fallen victim to employment identity theft, follow these steps:

  1. Report the Fraud: Submit an identity theft report to the Federal Trade Commission (FTC) and inform your employer about the misuse of your information. Additionally, consider reporting the issue to local law enforcement and the Department of Labor if it involves unemployment fraud.
  2. Freeze Your Credit: Reach out to the three major credit bureaus—Experian, TransUnion, and Equifax—to place a credit freeze. This action blocks any new credit accounts from being opened under your name.
  3. Correct Your Records: Get in touch with the SSA to review and amend your earnings record. Make sure your Social Security Statement accurately reflects your income.
  4. Get an IP PIN: Request an Identity Protection PIN (IP PIN) from the IRS. This code prevents individuals from submitting unauthorized tax returns with your SSN.
  5. Submit Form 14039: If your tax return was rejected due to a duplicate SSN, submit Form 14039. It’s the Identity Theft Affidavit to alert the IRS to potential fraud.
  6. Monitor Your Accounts: Consistently review your credit reports and bank statements for any unusual activity. Report any inconsistencies to your bank and credit reporting agencies.
  7. Contact the Unemployment Office: If you receive a notice of unemployment benefits you did not apply for, contact your state’s unemployment office immediately.

How do you protect yourself from employment identity theft?

Preventing employment identity theft involves taking proactive measures:

  1. Safeguard Your Personal Information: Keep your Social Security number and other sensitive information secure. Only share it when necessary.
  2. Be Cautious with Online Job Applications: Avoid entering personal information on job websites or applications.
  3. Limit Social Media Sharing: Be cautious about the personal information you disclose on social media. Avoid sharing sensitive details that identity thieves could exploit..
  4. Monitor Your Credit and Social Security Statements: Regularly review your credit reports and Social Security Statements. Check for any unusual or unauthorized activity.
  5. Use Strong Passwords and Two-Factor Authentication: Protect your online accounts by using strong and unique passwords. You can also consider activating two-factor authentication if possible.

Protect yourself from employment identity theft

Employment identity theft can lead to significant repercussions. However, staying informed and alert can reduce your risk of falling victim. Keep a close eye on your personal information and report any suspicious activity immediately. You should also take proactive measures to protect your identity. Act quickly to minimize damage and address the fraud if you fall victim. These precautions can help protect your personal and financial well-being from the effects of employment identity theft.