How Fraudsters Are Ripping Off Unemployed Americans — Even During a Pandemic

unemployment fraud graphic

Image by Desirée Tapia for COURIER.

By Mikhal Weiner

January 4, 2021

Amid the pandemic-driven economic recession, fraudsters continue to find ways to scam unemployed Americans out of their money.

Rony Corcos wasn’t surprised to receive an email from someone claiming to be a Headspace talent recruiter. The 31-year-old New York-based video editor and producer created videos for wellness companies for years before finding herself unemployed for several months. Like millions of other Americans affected by the pandemic’s economic crisis, Corcos received unemployment benefits and submitted myriad job applications online daily. 

Over the next few weeks after the email, Corcos spoke to three different “Headspace employees.” She received tasks, training, and completed a job interview, all without speaking to anyone in person. All communications took place over a secure messaging app.

“[The recruiter] held a thorough interview—telling me about the job, telling me about the benefits,” she said. It all seemed legitimate. In the age of COVID, doing everything through text and digitally seemed to make sense. She’d also done her due diligence. She’d checked all the recruiters’ names and LinkedIn profiles, and all the pictures matched the ones on their messaging app profiles. They had even sent her a company code of conduct on Headspace letterhead. Soon, though, things began to unravel. 

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The recruiters asked her to buy equipment, including an iPhone and an iPad, so that she’d be able to work remotely. Typically, the company would provide these, but “due to COVID,” they said they would have to reimburse her. Next, they asked her to send the equipment to have software installed at an IT shop in Georgia. Due to COVID, the recruiters explained, they’d have to be doing all of this from afar. The payments piled up: $214 up front for the Apple products, $142 to overnight ship them, $1,120 for software installation, $2,975 for more software and a laptop. They then explained she would have to fill out a direct deposit form with her bank account numbers and credit card numbers. By the time she figured out that she had fallen victim, Corcos had lost $5,700, closed all of her bank accounts, and canceled all of her credit cards. She was still unemployed. 

Unfortunately, this specific case is just a drop in the bucket. 

In the wake of the COVID-19 pandemic, the United States has seen a severe spike in unemployment rates. In fact, according to the Department of Labor, an additional 885,000 people submitted initial filings for unemployment benefits during the week that ended on December 12. As the pandemic ramps up (also on December 12, over 207,000 people were diagnosed with the coronavirus) and winter draws near, shuttering the few establishments that have kept afloat thus far, people have become desperate to find work. Companies are reeling as they try to navigate a shift to remote working. All of this desperation and confusion has created a rich opportunity, rife for scammers.

“A 2020 FlexJobs survey found that more than 72% of job seekers report being on guard or very concerned about scams on other job boards,” Brie Reynolds, career development manager and coach at FlexJobs and, told COURIER. “According to the same survey, 17% of job seekers have been a victim of a job scam (up from 13% in 2016), with another 18% saying they only avoided being scammed because they knew the warning signs.” 

Eva Velasquez, president and CEO of the nonprofit victim-assistance organization Identity Theft Resource Center, told COURIER that the ITRC has seen scamming take on a whole new dimension throughout 2020. “The reason [scams have] been so effective right now is because we have so many things happening at once,” Velasquez said. She explained that things like remote working, new hiring practices, and confusing government stimulus plans all sow uncertainty.

Unemployment fraud, in particular, has gone through the roof, according to Velasquez. In 2019, the ITRC received 19 calls about unemployment identity theft. In 2020 they received 800. This isn’t surprising, seeing as the Federal Trade Commission (FTC) has had over 275,000 fraud reports that specifically relate to COVID-19 and estimates personal losses at over $211 million. 

RELATED: Some Unemployed Americans Were Underpaid Through COVID-19 Relief Program, Report Finds

“It’s happening all around the world, and it’s definitely happening in the United States,” said Velasquez. “This pandemic has created an avenue for the proliferation of all kinds of other scams that are usually localized.” She explained that disaster scams, healthcare scams, and government funding scams all tend to be specifically focused on a particular region; scammers can’t offer hurricane relief in Colorado, for example. COVID-19 and its various relief programs, however, are everywhere. “Whenever you have big government programs that are confusing, it opens the door to scammers,” she said.

The new stimulus package that Congress passed on December 21 will provide $300 per week in enhanced unemployment payments and checks for $600 each for most Americans, which have already started making their way into bank accounts. Velasquez is certain fraudsters will find new, inventive ways to scam many Americans out of these much-needed checks. 

Her concern and certainty are well-founded. In June, Scott Dahl, the inspector general for the Department of Labor (DOL), told Congress in a briefing that roughly $26 billion of CARES Act funds could end up in the hands of fraudsters. In October, the DOL reported that they had seized $1.2 million in cash that criminals obtained by stealing personal information and fraudulently applying for unemployment and CARES Act aid. 

Velasquez suggests hypervigilance in an increasingly digital world and during unprecedented times where opportunists are on the prowl. The IRS, state unemployment agencies, and other government entities will never initiate calls, emails, or texts asking you to disclose personal or banking information. Legitimate recruiters and hiring managers do not require applicants to purchase equipment or pay fees. If, for some reason, an opportunity or individual raises any red flags at all, start by checking the FBI or the FTC to find out if there’s a known scam afoot.

RELATED: Lack of Relief Funding Is Desperately Widening the Inequality Gap

In a statement to COURIER, a spokesperson for Headspace confirmed that the company is aware of the scam that cleared Corcos’ bank accounts. The spokesperson noted that they are actively working to remedy the problem and are “incredibly disheartened to hear about the fraudulent job postings and phishing attempts by a person or group falsely claiming to be representatives from Headspace.”

Despite filing reports with law enforcement and compiling an impressive evidence file, it’s unlikely that Corcos will ever recover her lost funds. According to Velasquez, this is common, especially as scammers become more sophisticated. However, with so little economic relief from the government, many Americans find themselves in desperate situations that might last for years to come.

“It’s going to be a very challenging climate for everyone over the next couple of years,” said Velasquez. “And it’s going to be a good decade [before we recover].”


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