On Tuesday, the State of California Employment Development Department (EDD) announced that they have found evidence of organized criminal elements filing false disability insurance claims. In response, the EDD has updated their Help Fight Fraud page to include new Disability Insurance Scam FAQs
According to the EDD, there is no evidence of any breach of their system and no money has been confirmed to be lost to this specific scam at this time. The agency believes that this scam involves identity theft and criminals using information that has already been stolen and urges anyone who suspects their identity has been stolen to consider filing a report with the Federal Trade Commission (FTC.)
In response to this scam, the EDD has stopped payment on claims that are suspected of being fraudulent (including “recently created medical or health provider online accounts”) and “imposed additional vetting before any payment will resume.” Due to the additional vetting, many new legitimate claimants will see a delay in verification and payment.
What Can Employers Do?
- Return fraudulent forms to the EDD along with any relevant documents or information about the fraudulent activity.
- Complete the Fraud Reporting Form on the EDD website.
- Notify the affected employee and provide identity theft resources and information on how to file an identity theft report.
To combat scams such as disability insurance claim fraud, unemployment benefit fraud, or paid family leave fraud, always contact the EDD immediately if the claimant:
- Has never been your employee;
- Has been terminated, laid off or has quit their job;
- Is receiving wages;
- Has not stopped working;
- Is known to be working for another employer;
- Has filed for workers’ compensation or is believed to be planning to do so;
- Is using a Social Security number incorrectly; or
- Is working under another name.
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Since 1995, Emplicity has provided a smarter, more secure, and integrated platform of employer services to its 300 business clients and their 8,500 employees. As a Professional Employer Organization, or PEO, the California-based HR outsourcing firm simplifies the compliance, administration, and support businesses need in the areas of employee benefits, payroll, and human resources technology.
NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of its clients.