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  • Writer's pictureRobert Ryerson

What You Need to Know about Identity Theft and the COVID-19 Pandemic

The COVID-19 pandemic has contributed to a staggering number of lives and jobs lost in the past year. This past January, the United Nations’ International Labour Organization estimated that 255 million full-time jobs were lost worldwide due to the virus and the government-imposed safety guidelines to keep it from spreading.

Governments worldwide, including in the US, issued stimulus checks and implemented other economic measures to support their citizens. Unfortunately, criminals took advantage of the situation.

Reported Instances of Identity Theft Doubled in 2020

According to the Federal Trade Commission (FTC), a total of 2.2 million cases of identity theft were reported in 2020. This is double the amount that was reported the year prior. In a February blog post for Identity Theft Awareness Week, the FTC noted this surge has in large part been a result of cybercriminals preying on those financially affected by the pandemic.

Credit card fraud, which is generally the most prominent source of ID theft, rose 44 percent in 2020, but it still ranked second in ID theft complaints received by the FTC. Because of the scale of government benefits made available to the public, cybercriminals increasingly sought to file for these benefits in other people's names. Often overwhelmed by the number of claims, state-run unemployment offices were noticeably less effective at spotting these thieves.

Government Benefits Fraud

Overall, the FTC received more than 406,000 ID theft claims involving government benefits fraud in 2020. Only 23,200 of these cases were reported in 2019. According to the Office of the Inspector General for the Department of Labor, qualified Americans lost $36 billion of the allotted $360 billion in unemployment benefits made available through the Pandemic Unemployment Assistance Program of the federal CARES Act. In some instances, criminals were able to garner more than $20,000 per fraudulent claim.

In a story for CNBC, founder and chief executive Blake Hall called this the largest fraud attack in US history. He added that, in some states, these fraudulent claims accounted for more than 35 percent of all new applications and were sourced from international crime organizations in countries including China, Russia, and Nigeria.

Speaking to the difficulties in preventing these instances of fraud, New Mexico Department of Workforce Solutions cabinet secretary Bill McCamley told CNBC, "It's a little bit of a high wire act because there's so much pressure to get money out." New Mexico instituted a five-day waiting period to allow time to find out whether or not a specific bank account was linked to suspicious activity. However, this policy ended up hurting those who were truly in need of the financial assistance.

Loans and Tax Identity Theft

Fraudsters not only took advantage of individual assistance payment programs, but also those dedicated to small businesses. To that end, the FTC received nearly 100,000 reports of personal or business loan frauds, which was up from 43,920 in 2019. Not all of these were connected to government relief programs, but those that were made up a significant portion of the increase in cases.

Tax return identity theft is another relatively common form of fraud that increased substantially in 2020. The FTC received 89,390 reports of these instances last year, up from 27,450 in 2019. Similarly, the frequency of these reports began surging in the early stages of stimulus payment distribution.

To help combat this issue, the Internal Revenue Service (IRS) announced in December 2020 that it was making its Identity Protection PIN Opt-In Program available to taxpayers nationwide as long as they can verify their identities. The program has a rigorous authentication process to ensure accuracy. It was previously only offered to those who had been victims of identity theft or tax refund fraud.

How to Reduce Risk

In addition to the IRS' Identity Protection PIN Opt-In Program to prevent tax fraud, there are a variety of other programs and measures you can take to protect yourself from identity theft.

The FTC offered webinars and other resources during Identity Theft Awareness Week, which spanned February 1 to 5. The webinar "Ripple Effects of COVID-19 Related Identity Theft & Tips to Protect Yourself in 2021" is still available on-demand. It is of particular relevance since it delves into identity theft concerning Small Business Administration (SBA) loans, unemployment benefits, and federal stimulus payments. The FTC also offers a range of resources from preventative measures to identity theft recovery at

Moreover, there are many different services and software available that can at least provide consumers with some layer of protection against identity theft. These services, which include IDShield, IdentityForce, Complete ID, LifeLock, and Identity Guard, have monitoring features to alert consumers of suspicious activity. IDShield and IdentityForce are particularly effective because they also offer complete restoration services on all major categories of identity theft.

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