Blog

What is Employment Identity Theft and What to Do If It Happens to You!

Typically, when people discuss identity theft, they think of stolen credit cards and drained bank accounts. However, employment identity theft has increased in recent years. According to the Federal Trade Commission’s annual Consumer Sentinel Data Book, over 110,000 cases of employment related identity theft were reported in 2021. So, what is employment identity theft and what should you do if it happens to you? Read our guide below for tips! 

What is Employment Identity Theft? 

Employment related identity theft is when someone uses your identity to apply for a job or pass a background check. Typically, thieves do this when they know they cannot get hired using their own information. Thieves can do this with just your name and Social Security number. But not only is it illegal to use someone else’s Social Security number in general, but it is considered identity theft when this information is used for personal gain when applying for a job.  

An increasingly common form of identity theft is unemployment fraud. This is when someone uses your personal information to apply for unemployment benefits. Unfortunately, identity theft related to government benefits increased by almost 3,000% in 2020. 

This type of identity theft can be potentially devastating because it allows another person to work under your identity. This can affect your tax returns, Social Security benefits, and medical benefits. It could also result in lost tax returns, tax audits, and incorrect information on government records and credit reports.  

How to Prevent Employment Identity Theft 

Preventing employment related identity theft is like preventing identity theft in general. Never give out your personal details, such as your Social Security number, birthdate, bank PINs, or bank account information. It is also a good idea to safely store any documents that may include this information. If you need to dispose of documents containing valuable information, burn or shred them to destroy the documents.  

If a potential employer might ask for your Social Security number when you apply for a job so they can run a background check. However, you are not required to provide it just for an application. Instead, you can ask provide this information later when you have formally been offered a job. It is also not essential for you to provide details of your bank account when applying for a job. 

To add extra security to your Social Security number, the IRS now has a tool called the Identity Protection PIN, which you can sign up for on the IRS website. This six-digit PIN can help prevent someone else from using your Social Security number. Additionally, there are many third-party security programs that you can look into for more security and peace of mind.  

How to Spot Employment Identity Theft 

Identity theft in employment can be difficult to spot, so it’s important to act quickly when you notice something. If you become a victim of employment related identity theft, you may receive: 

• A W-2 or 1099 from an employer who you do not work for 
• A statement from the Social Security Administration (SSA) informing you that your benefits have been adjusted or denied because of wages you did not earn
• Confirmation of unemployment benefits that you did not apply for 
• Any of the following documents from the Internal Revenue Service (IRS) 
• Form CP01E, which notifies you of employment related identity theft 
• Form CP2057, which requests that you check a potential income discrepancy 
• Form CP2000, which requests verification of unreported income, payment, or credit 

Each of the situations above could be a warning sign that someone has been using your information for their benefit. Now that you can identify this type of fraud, it’s important to understand how to fix it.

What to Do If You Suspect Identity Theft in Employment 

If you believe your information was used by another person to gain employment, there are several things you can do to help protect yourself: 

1. Check your bank records and credit report for unfamiliar or incorrect information. While it is less likely for this type of identity theft to affect these accounts, it is still important to check them for fraud. Go to your bank to ask for bank account records, and go to annualcreditreport.com to access your credit report.  
2. Notify the credit reporting agencies (CRAs)–Experian, Equifax, and TransUnion—that you suspect your identity has been stolen. If you call, be sure to follow up in writing by certified mail and request a response. If you did find inaccuracies in your credit report, notify the CRAs of these as well. When you follow up in writing, include a copy of the credit report with the errors marked on it. Once you report identity theft with the CRAs, they are required to investigate the issue by the Fair Credit Reporting Act. You can also ask the CRAs about placing a free one-year fraud alert in your credit report. The agency you contact will notify the other two.
3. Notify your bank that your identity has been stolen. Under the Electronic Funds Transfer Act, banks are required to investigate reports of identity theft, as well as any unauthorized transfers. If they find an error in your information, they are required to correct it. If they find that unauthorized transfers have been made, they are required to reimburse you. 
4. Find where your information was used by using the government’s E-Verify tool. You can go to e-verify.gov to find out which employers have been running background checks on you. If you suspect identity theft, reviewing the information available through this website can help you identify any unfamiliar employers. 
5. File a complaint with the Federal Trade Commission (FTC). If you know where your information was used, include this in what you tell the FTC.
6. If you received a W2 or 1099 for a job that you did not have, contact the SSA for help in reviewing and correcting your records. Do not include this information on your tax returns! If you have tried to file your tax returns but cannot because someone has already filed under your Social Security number, visit the IRS’ guide to identity theft and complete a 14039 form for help.
7. Document everything! Keep records of all bank statements, inaccurate W2s or 1099s, any of the IRS forms mentioned above, records found on e-verify.gov, and anything else that may be connected to identity theft. Also, keep records of all communications with your bank, the CRAs, and credit agencies. If you need to get a lawyer involved, these documents will become very important. 

How An Identity Theft Lawyer Can Help 

If you have followed the steps above, but you are still being affected by identity theft, it may be time to call an identity theft lawyer. Under the Fair Credit Reporting Act (FCRA), credit agencies are required to investigate any disputes filed with them. If they confirm that there are errors, the CRAs, or the creditor providing them with information about your account, are required to fix the errors. Additionally, the Electronic Funds Transfer Act (EFTA) requires banks to investigate all reports of identity theft. 

An identity theft lawyer can help if the CRAs or your banks have failed to follow their legal obligations and investigate your report of identity theft. With their advanced understanding of federal law surrounding the FCRA and the EFTA, an identity theft lawyer will be able to help hold banks and the CRAs accountable to the law. If you have lost money due to employment identity theft, they may even be able to help restore your finances. 

The Financial Justice Initiative is dedicated to helping consumers hold banks and the CRAs accountable to the law. Our lawyers, teaming up through Terrell Marshall Law Group and Schlanger Law Group, two of the nation’s leading consumer protection law firms, are passionate about protecting the rights of identity theft victims. If you believe that you are the victim of employment identity theft and that your rights have been neglected, contact us for a free case consultation.