What is Employment Identity Theft and How Can It Happen?

Employment identity theft is when someone uses your name and personal information to gain employment. Like other forms of fraud, employment identity theft is illegal and can have devastating financial consequences for its victims.

Here’s what you need to know about employment identity theft, and what to do if you find out you’ve become a victim.

What is Employment Identity Theft?

Employment identity theft occurs when someone steals personally identifiable information (PII) like your name, birth date and Social Security number (SSN) to get a job using your identity. The perpetrator may provide your name and other personal information during the hiring process and supply your SSN and other key pieces of PII to the employer for tax and payroll purposes when they get hired.

Perpetrators of employment identity theft may use their victim’s information to work and earn wages, file tax information, and even receive government benefits. The fraud can go unnoticed for a long time if the victim doesn’t know to look for signs of identity theft.

There are many reasons that someone may commit employment identity theft. For example, they may need to earn income but are unqualified for work because of a criminal record, a spotty employment history or don’t have a required work permit.

They may want access to an employer’s systems for criminal reasons or corporate espionage. Or they may plan to work illegally and file fraudulent tax returns or claim unemployment benefits in your name.

How Does Employment Identity Theft Happen?

Someone can only commit employment identity theft when they have access to your PII, including your name, birth date, SSN, and other information generally required by employers during the hiring process. There are many ways that someone may gain access to your PII and use it for employment identity theft:

• A data breach or hack leaks your personal information online and/or your PII is sold on the dark web.
• Your mail that contains personal information is stolen from an unsecured location like your front step, mailbox, or trash bin.
• You unknowingly provide your PII to someone running a phishing scam who is impersonating a legitimate organization.
• Someone with access to your PII, like a colleague or an employee at a company you do business with, steals your PII to use it for their own gain.
• A family member or close friend steals your PII to use it for their own gain.
• Your identification, such as a driver’s license or passport, is stolen or a fake identification card is created using your information.

Once someone has enough PII to commit employment identity theft, they can use your identity to apply for jobs and provide your information to the employer when they get hired. They can also earn wages, file tax returns, and commit other types of fraud.

How Can Employment Identity Theft Affect You?

When you become a victim of identity theft, there are many potential consequences:

• Tax liability: the IRS may think you owe taxes on income you didn’t earn. This could result in a discrepancy on your tax return, and it can even trigger an audit.

• Government benefits: your Social Security benefits may be adjusted or denied based on income that was falsely reported to the Social Security Administration (SSA).
• Recovery costs: it can take a lot of time, effort, and money to restore your identity.
• Reputational damage: if the person using your identity behaves unprofessionally or unethically on the job, your professional reputation can suffer. You may even have trouble getting a job in the future when employers perform background checks.

How to Tell if Someone Is Using Your Information for Employment

There are red flags to look out for employment identity theft:

Check with the IRS.

Look out for notices from the IRS regarding employment identity theft or wages you never earned. If you file a tax return but it’s rejected because someone has already filed using your SSN, you’re likely a victim of tax identity theft. The easiest way to check your tax records online is to create an online account with the IRS.

Check with the Social Security Administration.

If your Social Security benefits are reduced or denied, or your Social Security statement shows higher earnings than  expected, you might be the victim of employment identity theft. You can check your Social Security statement online by opening an account with the SSA.

Watch for communications for employers.

If you receive W-2s or 1099s from employers you never worked for, or you receive other communications including employment offers or employee benefits statements, someone may be working for that employer using your identity.

Watch for unemployment notices.

If you receive unexpected notice that you have been awarded unemployment benefits, someone may be using your identity to commit unemployment fraud.

Check your credit report.

If you check your credit report and find accounts you don’t recognize or applications for credit you never submitted, your identity may have been stolen.

How to Report Employment Identity Theft

If you believe someone is using your identity for work, report it immediately to stop the fraud.

• File an official identity theft report with the Federal Trade Commission (FTC) at IdentityTheft.gov or by calling 877-382-4357.
• Contact the Consumer Financial Protection Bureau (CFPB) to file complaints about fraud committed by businesses and organizations.
• Contact your state’s attorney general to seek legal advice and file a police report with local law enforcement.
• If someone has filed a tax return using your SSN, you need to contact the IRS and submit form 14039.
• You may need to contact the SSA to correct and update your earning records.
• Report unemployment benefits fraud to the state unemployment office.
• Freeze your credit reports with all three major credit bureaus – Equifax®, Experian®, and TransUnion®.

To help protect your information, consider identity theft protection. IdentityIQ identity theft protection services provide you with real-time alerts and $1 million in identity theft insurance, underwritten by AIG, if someone tries to use your personal information without your knowledge.