Colorado Identity Theft Prevention Update

Colorado continues to make updates to improve their systems for identity theft/fraud reporting. In a recent Employer update (dated March 2021) Colorado CDLE has added a new form that should be completed when an employer receives a Fact Finding Questionnaire for someone who has been a victim of Identity Theft. 

If you receive a Fact Finding questionnaire for:

  • Someone who still works for you
  • Someone that has never worked for you 
  • Someone with a non-matching name and SSN

Identity Theft that is found as the result of a 1099-G form should be reported through the Report Invalid 1099 form.

 

Employers are advised to:

  1. Report immediately the suspected fraud to CDLE via their online form https://co.tfaforms.net/f/Employer_Reported_Identity_Theft
    • If you report the fraud to Thomas & Company, we will report the identity theft fraud by completing the online form on your behalf to report this to the state.
  2. Disregard any additional correspondence from CDLE on this claim. Until the state can reprogram their system, the additional documents will still be sent.

CDLE advised that employers should not:

  1. Complete the Fact-finding questionnaire or respond online through MyUI Employer or SIDES. 
  2. Do not file an appeal. Payment of any fraudulent benefits will not be charged to your account and will not impact your experience rating if the fraud is verified.
  3. Do not all the main UI Call center at 303-318-9000 (800-388-5515). If you have any questions call the Employer Services line at 303-318-9100.

According to the February, 2021 newsletter "The rise in unemployment insurance claims associated with COVID-19 has brought with it a substantial uptick in fraud and identity theft activity. When a claim is filed using the stolen identity of one of your employees, you receive a questionnaire by email or U.S. mail requesting information about the job separation. If your employee is still employed, and they state they did not file a claim, please complete the questionnaire as soon as possible telling us that."

 

Colorado recently announced that they will start sending out letters by the end of April to both the individuals and employers involved in the fraudulent claims. Individuals filing a fraud report usually don’t hear back from the CDLE. One purpose of the letters is to provide confirmation. Another even more important goal is to provide an official confirmation that the filer was a victim of identity fraud, a document that can then be used in dealing with credit agencies, creditors, banks and others.

 

The CDLE estimates that 1.2 million fraudulent claims for benefits have been filed through the state’s unemployment system, surpassing the just under 1 million valid claims filed since March 2020. Before the pandemic, the state dealt with fewer than 100 fraudulent claims a year.

 

“The letter that CDLE is going to send out is really important for individuals to have,” said Colorado Deputy Attorney General for Consumer Affairs Steve Kaufmann. “That will allow them to manage the situation more effectively.”

 

Last summer, early victims of unemployment fraud were advised to file a police report and obtain a letter stating they had suffered identity theft. But the crime wave, driven by organized rings, is so rampant that local law enforcement can’t investigate, much less process, the cases, Kaufmann said. The advice now is don’t file a police report.

Instead, victims should report unemployment insurance fraud on a dedicated CDLE web page, which has separate forms for individuals and for employers. Employers who receive a request for benefits they consider suspect are urged to contact employees to find out if they actually filed. If the claim isn’t legitimate, they are urged to file a fraud report and the employee should file one as well.

 

Colorado Department of Labor and Employment states:

  • CDLE has not experienced a data breach.  Fraudsters are using information stolen in recent data breaches to file fraudulent claims.
  • CDLE has increased the size of their investigation unit to address the rise in fraudulent claims.
  • CDLE has implemented a sophisticated system to check claims for markers of identity theft,
  • CDLE has partnered with a federally certified technology firm to streamline their identity verification process.
  • CDLE has indicated that once a case has been determined to be fraud, benefits that were paid on the fraudulent claims will not impact your experience rating. 

If you have received a 1099-G document from the Colorado Department of Labor and Employment but did not file a claim for unemployment benefits, you may be a victim of identity theft. Unfortunately, fraudsters steal or purchase private information from illicit data brokers and use that information to file fraudulent unemployment claims. While Colorado has a sophisticated multi-factor program in place to flag suspected fraud, no system is perfect.

Here’s what you should do if you’ve received a 1099-G document from the Colorado Department of Labor and Employment but did not file a claim for unemployment benefits:

  1. Report it to Colorado using the Report Invalid 1099 form.
     
  2. Contact the three consumer credit bureaus and put a fraud alert on your name and Social Security Number (SSN). Credit Bureau Contact Info: Equifax: 1-800-525-6285 | Experian: 1-888-397-3742 | TransUnion: 1-800-680-7289
     
  3. Create a file where you can keep records of this identity theft in one place.

For more information specific to CO Identity Theft Issues, please refer to the CDLE website at https://cdle.colorado.gov/fraud-prevention or view the FAQ guide here.