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03/08/2021

Covid-19 related benefits fraud has cost the US $36 billion

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The insurance American citizens received for losing their jobs due to Covid-19 has now become a scam that has now hit every state. In a recent report published by CNBC, more than $36 billion of fraudulent claims took place in the U.S via unemployment benefits. The losses occurred because of improper payments after the government passed the CARES Act during the Spring of last year.

The government has clarified that they are taking strict action against fraudulent activities in the name of unemployment benefits. Notably, the U.S has faced a major crisis during the pandemic, and the report says that more than 9.8 million people lost their job during the Covid-19 outbreak.

A report claimed that fraudulent activity had exploited the unemployment benefits of more than 35-40% of the candidates in different country states. In the last month, the U.S government has passed a relief package of $900 billion because of Covid-19, which will benefit all the workers operating in various industry sectors. There will be a strict check to ensure that the relief package’s payment goes to the people who actually need it.

It is also acknowledged that a few organizations are operating the scam from Ghana, Russia, China and Nigeria. According to a recent report, an engineering student from Nigeria has made $50,000 during the pandemic through fraudulent claims. He hacked the list of real people who were registered to receive financial aid from the U.S government’s Covid-19 relief package and took unlawful benefits from them. As the unemployment claims get higher in Florida and Georgia, the scams became more frequent. In a recent finding, it has been said that the rate of cybercrime has significantly elevated during the Covid-19 period. Nearly $600 million has been removed from the system through fraud, and only 8% of the fund allocated were actually transferred to people who needed it. The state suspended all the payment activities for a couple of days to figure out how to tackle this scenario. Washington, DC itself has identified more than 1.2 million cases where fraudulent activity has taken place.

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