Unsuspecting fraud victims receiving unsolicited debit cards

The latest technique fraudsters are using to scam unemployment benefits

BOSTON — The envelope looked official. So did the credit card inside. But Celia Tower grew suspicious.

“I hadn’t put in for any credit card or debit card from anywhere,” said the Stoughton resident.

The card, a ReliaCard issued by U.S. Bank, landed in her mailbox almost a month after her boss alerted her to a notice from the Massachusetts Department of Unemployment Assistance (DUA). Someone was trying to collect $68,000 in unemployment benefits in her name, according to that October letter.

Tower, who is employed, told 25 Investigates' Ted Daniel that after the initial DUA letter she immediately notified the state of the suspected fraud and believed it was resolved, until she opened up her mail last week and found the Visa debit card.

“You go online, you fill out a form, they tell you to call your police department fill [out the form] and report,” said Tower, who once again took steps to report the fraud and clear her name. “I called Equifax. I’ve put a lock on all of my credit. It is time consuming. It’s more aggravating than anything.”

In all, Tower estimates she has spent nearly eight hours in total trying to rectify the situation.

U.S. Bank’s ReliaCard is a reloadable pre-paid debit card used to pay unemployment benefits in at least 15 states. Massachusetts is not among the states that uses the card, according to U.S. Bank.

25 Investigates contacted the bank but they didn’t offer an explanation as to why Tower received one of their cards.

“These fraudulent cards were mailed out and money was actually deposited on many,” said Terry Savage, a personal finance expert and author who’s been tracking unemployment fraud across the U.S.

She says debit cards from banks that pay state benefits have been showing up unsolicited at homes all over the country. Savage says people who receive one without asking for it should assume an attempt is being made to collect in their name.

“If they sent you an unsolicited card and you call the 800 number to activate it, was that the key that allowed them to withdraw the money? It hasn’t been explained yet by the FBI. It’s a huge investigation,” said Savage.

Tower froze her credit but she worries this may not be the end of her troubles.

“My problem is that I’m worried about getting a tax bill at the end of the year," said Tower. "And then what do I do at that point?”

Her concern is legitimate as unemployment compensation is taxable income and is reported to the IRS.

Savage says the full extent of the fraud may not be known until early next year, when unsuspecting fraud victims may see benefits they never received counted as earnings on their taxes.

“I think it’s going to be a total disaster in January and February,” she said. “The states report that the money went out to your name and social security number. How do you untangle that mess? That’s going to be next winter’s problem.”

In addition to US Bank, 25 Investigates also tried to get answers for Celia from the Massachusetts Department of Unemployment Assistance.

They recommend some important steps for anyone who receives one of these cards.

First, don’t toss the card. You’ll want to call ReliaCard to cancel it and ask them which state issued the card. Then get in touch with that state’s unemployment agency.

You’ll also need to report the fraud to the state of Massachusetts and the Internal Revenue Service or IRS. The agency has a form that will allow you to report fraud.

Finally, even if tempted or just curious, don’t activate the card or spend the money.