I Didn’t Claim Unemployment Insurance….Why Did I Receive This Card?

A notice from the Department of Labor arrived last week saying that I had filed for unemployment, which is weird, because I had not fired myself! After making sure I was, in fact, still part of my team, I discovered what was going on.  There has been a rash of fraudulent unemployment insurance claims around the country and it seems I am now entangled in them.

It happened to me as an employer and as employee, it happened to my teammates as employees, it happened to my colleague’s mother and to my wife, it happened to my clients: it’s happening everywhere. Not only are the consequences bothersome to correct, but we’re the lucky ones.  This is just a hassle for us, but it’s real life for millions of Americans who count on the insurance. The criminals perpetrating these acts are causing further pain for those who need it at the worst time possible.

Unemployment Insurance Is Not A New Program, Why Has It Become The Biggest Fraud Target?

cares act funds flow chart

Source: Howmuch.net

Unemployment Insurance, and Unemployment Insurance Fraud, are not a new phenomenon. But the CARES Act in 2020 was designed to help as many people as fast as possible during one of the worst global pandemics of all time.  Unemployment Insurance got a “boost” from the CARES Act in the form of “Pandemic Unemployment Assistance” or PUA.  This not only increased the amount of relief for unemployment claimants, but also broadened the definition of who could claim unemployment.  Previously self-employed individuals, gig workers, freelancers, part-time employees, and contractors did not qualify for unemployment, but the PUA opened up the program to these groups as well.  Despite the good intent, criminals quickly used this newfound loophole to concoct schemes and steal more money.  Of the $560B in relief allocated to individuals, $260B was intended for extra unemployment benefits. Combined with an overstrained government office just trying to keep up, this proved to be a target-rich environment for criminals.

How Many People Have Been Affected?  How Much of the $260B Has Landed In The Wrong Hands?

The Department of Labor believes $36B dollars have been lost to fraudulent unemployment claims in the last year as of January 5th according to CNBC. As the CARES Act and others were updated during the national fight against COVID, the budget for additional unemployment insurance ballooned another $100B, to $360B in total, and the confirmed fraud loss now equals 10% of all payments.  The count is not over yet either.  With 8 million recipients on file as of December 2020 it will take years to figure out how much aid fell into the wrong hands.  State agencies still believe that 35%-40% of all new applications are fraudulent.  But the good news is that this type of fraud is going to get tougher with new measures instituted with the most recent relief package. Now applicants must provide confirmation of their identity and job status in order to qualify.  That may result in a delay of benefits, but the new measures should help to close the flood gates and prevent our tax dollars from landing in the wrong hands.

How Do I Know If It Has Happened To Me?  What Do I Do If It Has?

You are your own best defense when it comes to protecting your identity, credit, and status.  We monitor our life insurance, our property insurance, and our health insurance, but we are slow to invest in insuring our identities.  We must face the fact that no matter how well we think we have kept our private information out of the hands of the public, it exists in websites and databases outside of our control.  The major data breaches of the past decade have potentially touched most consumers. That is our new normal.

I would encourage you to sign up for a credit monitoring service or at the very least, get your free credit report and monitor your activity yourself.  If you don’t intend to apply for new credit in the near future, consider “freezing” your credit by contacting each of the three reporting agencies. This may help secure your credit, but it may not help with unemployment fraud.

If you learn that someone is trying to claim a benefit with your identity, alert the Colorado Department of Labor immediately.  Don’t be surprised if you don’t hear anything back from them quickly as, they are dealing with thousands of claims every week.  If you get the VISA debit card loaded with your benefit payment, don’t use it! Instead, go to the card website and cancel it. Also be sure to monitor your bank accounts and mail for additional discrepancies.

We have put together a helpful Identity Theft response document with websites, phone numbers and a checklist of what to do should you be affected. Please have a look and contact me if you have questions.

It is an unfortunate reality.  Our country, and the world, have been upended in so many ways this past year. Substantial legislation designed to help many has unfortunately been targeted by those looking to make a quick buck. Unemployment Insurance is a helpful tool in keeping our communities and economy healthy, but we need to play a part in making sure that we protect ourselves and our tax dollars from being misused.

David Morrison

David Morrison

David uses Values Based Financial Planning to align your financial choices with your most important goals and your most deeply held values. He has a comprehensive process to consolidate, coordinate and simplify your financial life in a way that brings you more confidence and clarity about your future. Learn more about David here.

More Posts

,

Press Release: Steve Booren Recognized by Barron’s as a 2021 Top Financial Advisor

Steve Booren named a Barron's Top Advisor

DENVER, Colo.— March 25, 2021 – Steve Booren, an independent LPL Financial advisor in Greenwood Village, has been recognized as one of the 2021 Top 1,200 Financial Advisors in America, as ranked by Barron’s. Booren, Founder of Prosperion Financial Advisors was recognized as the 15 advisor in Colorado. Read more

,

PRESS RELEASE: Steve Booren Recognized in Forbes as a 2021 Best-in-State Wealth Advisor

Forbes Best In State Wealth Advisor Steve Booren

DENVER, Colo. — February 11, 2021 – Steve Booren of Prosperion Financial Advisors was recently ranked No. 34 in Colorado in the 2021 Best-In-State Wealth Advisors list published by Forbes.  

According to Forbes, the annual list spotlights the nation’s top-performing advisors, evaluated based on a methodology developed by SHOOK Research. Advisors are also evaluated based on personal interviews, industry experience and revenue trends, among other criteria.

“On behalf of LPL Financial, we congratulate Steve Booren for being recognized on this year’s Forbes Best-in-State Wealth Advisors list. This past year has demonstrated that strong financial advice cannot be underestimated, and that personalized financial advice is critical in helping clients work toward achieving their short and long-term financial goals,” said Angela Xavier, LPL executive vice president, Independent Advisor Services. “We applaud Steve for continuing to raise the bar in our industry and demonstrate the value of the independent model in creating meaningful and long-lasting investor-advisor relationships.” Read more

Highlights of the CARES Act

Capitol building

Late last week the senate passed and the President signed the CARES stimulus package designed to, among many things, curb the financial turmoil created in the wake of the Coronavirus. This $2.2 trillion, 800+ page legislation offers meaningful help to investors, business owners, and those directly impacted by layoffs or the virus.

Using several sources we’ve compiled a list of some of these benefits that our clients might find most helpful. If one stands out to you, please reach out to us and we’ll be happy to walk through how it might apply to your situation. We’d also recommend connecting with your CPA regarding tax-related items.

Here are some of the highlights:

Read more

,

Improving Investor Behavior – Investing in Panic

Emergency Exit Sign

A lot can change in 30 days. One short month ago, markets were knocking on the door of all-time highs, businesses were doing well, and Joe Biden was behind several candidates in the Democratic primaries.

Oh, how things change quickly. Very quickly.

Even when compared to historic drops, the decline of about 18 percent that we’ve seen in the broad market indices took only 13 days. The start of the Great Depression took 28 days to reach that level. In 1998, it took 31 days. The Great Recession didn’t even make it in the top five fastest drops.

I want to focus on two questions in this column: First, to what can this speed of this market drop be attributed; and second, is it warranted?

All dramas need a villain. This time it’s the Coronavirus. The rapid spread of the virus led to ghost towns (Wuhan), which in turn led to locking down an entire country (Italy). This is a serious virus, and any amount of death or damage caused by it is too much. I don’t intend to trivialize it, nor the efforts of healthcare workers around the world fighting on the front lines.

But as investors, we have a mandate to try and understand where to draw the line between reasonable concern and emotion-driven panic. Too much emotion leads to panic selling, which in turn creates opportunities for those willing to buy when others are fearful.

I’d argue that we are well over the line of reasonable concern and deep into an emotional panic. During the 2008-2009 recession, corporate profits declined 46 percent, according to Brian Wesbury, Chief Economist at First Trust. Comparably, the current declines point to an estimated profit decline of 50-80 percent. Effectively, the market is saying that Coronavirus will have a greater effect on American businesses than the Great Recession, a time in which the entire monetary system seemed to be teetering on edge.

Consider these five critical elements of an economy: The Federal Reserve, taxes, regulatory policy, trade policy, and spending. What’s the status of these? The Federal Reserve just announced yet another cut to rates last week, making them even more accommodative than they already were. We just passed significant tax reform two years ago. Burdensome regulatory policies have been reduced. Trade policies (while challenging) have shown progress. All that to say that our economy is a pretty good place for business right now, and far better than it was during 2008-2009.

If the economy is strong and unemployment continues to be at an all-time low of 3.5 percent, why is there such a panic? I think part of it is the unknown. We’ve seen movies and TV shows designed to scare us with viruses. A disease that demolishes populations, creates zombies and generally wreaks havoc. We’re seeing something we don’t fully understand, and governments around the globe are reacting. Social media posts are encouraging everyone to start wearing gas masks and stockpiling toilet paper. Media, both traditional and social, perpetuates panic with continuous updates from a variety of “experts.” Couple that with the financial industries’ recent trend of eliminating trading costs and arming investors with phone apps, and you start to understand how easy it is for investors to panic sell with virtually no barriers.

On February 3, some 12,000 Robin Hood (a “free trading” app) investors bought Tesla shares for the first time. It reminds me of Bitcoin in 2017 and the dot.com bubble of 1999. Greed is a powerful emotion. When prices decline, human nature extrapolates that values will go to zero. Fear overtakes common sense, rising to panic.

Going one level deeper, consider a popular investment these days called exchange-traded funds (ETFs). These derivatives are designed to mirror the performance of a basket of underlying assets, usually stocks. For example, this allows an investor to buy a share of an ETF that reflects the performance of the entire S&P 500. Investors like them as they provide a low-cost method of diversification.

But behind the scenes, there’s a lot of trading going on to keep the derivative in line with the underlying asset. This gets complicated quickly, but suffice it to say that I think ETFs may be contributing to the dramatic swings we’ve seen lately. Liquidity, options, and other derivatives drive big moves, and these funds utilize tons of them. Computer-driven buying and selling mean it can all happen in a moment’s notice. I think the very financial instrument that was designed to give investors an edge has increased volatility and speculation.

Even when armed with logic and facts, our emotions can still get the better of us. There’s no doubt that headlines are scary, and the market drops are meaningful. But logic has to win over emotion. Think about this: during the Apollo 13 mission of 1970, the moon landing turned bad when two oxygen tanks and two fuel tanks failed. According to Jack Swigert, the chief pilot on the mission, had those variables been thrown at them during the simulator drills, they would have responded, “Come on, you are not realistic.” No one could have seen this coming, but it happened. One month ago this whole scenario seemed impossible, but here we are.

It’s during times like these we are reminded of the importance of good investor, and indeed financial, behavior. Get back to basics: Do you have a financial plan? Do you have savings? Do you have a project account set aside for emergencies? Are you spending less than you make? Are your investments diversified?

If all these boxes are checked, good investors will look at moments like these as opportunities. Asset prices have declined, allowing us to purchase some of the best companies in the world at discounts unimaginable only 30 days ago.

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post. He was recently named a Barron's Top Financial Advisor and recognized as a Forbes Top Wealth Advisor in Colorado.

More Posts

Follow Me:
LinkedInYouTube

,

A Note to Clients on Virus Volatility

Rollercoaster

As I’m sure many of you are aware, this past week has been a difficult one for investors. The broad market indices have seen swift and dramatic drops, leaving many scared, confused, and upset.

Make no mistake; it is moments like these that define all of us as investors. Fear is an emotion, and one that can quickly snowball into an all-out panic. We’ve often said your behavior as an investor will ultimately have a far greater effect on your outcome than when or how you are invested. This is one such moment.

Read more

,

PRESS RELEASE: Steve Booren Recognized in Forbes as a 2020 Top Wealth Advisor in Colorado

Best in state wealth advisors

DENVER, Colo. — January 30, 2020 – Steve Booren of Prosperion Financial Advisors was recently ranked No. 26 in Colorado in the 2020 Best-In-State Wealth Advisors list published by Forbes.

According to Forbes, the annual list spotlights the nation’s top-performing advisors, evaluated based on a methodology developed by SHOOK Research. Advisors are also evaluated based on personal interviews, industry experience and revenue trends, among other criteria.

Read more

,

From Clutter to Clarity: What to Toss and What to Keep

From Clutter to Clarity Workshop

By Michelle Santaferro, organizing expert and owner of Organomics

Like many during this time of year, you may have found certain documentation painful to retrieve and scattered in several locations.  But there’s good news: you can create a system to quickly file and find anything you need financially. Let’s look at the steps you can take to retrieve things quickly.

Read more

,

2016 Taught Us These 3 Lessons

If 2016 has taught us anything, it is to expect the unexpected. So as we wrap up a rollercoaster of a year, I find myself looking back to three surprises and the lessons they taught us. In the same way the bottom of a cup is revealed only when the liquid is quickly stirred, sometimes it takes a whirlwind of the unexpected to remind us of a few simple truths.

Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post. He was recently named a Barron's Top Financial Advisor and recognized as a Forbes Top Wealth Advisor in Colorado.

More Posts

Follow Me:
LinkedInYouTube

“Revolution” by Brian Westbury

“Elections have consequences and the impact on U.S. economic policy of last week’s election will be enormous. We’re sure we’ll be writing about all of these issues in much greater depth over the next several months, but, for now, here’s a broad outline of what to expect.

One of the Republicans’ first tasks will be repealing much (but not all) of the Affordable Care Act, also known as Obamacare. To get that done, they will use the budget reconciliation process in the US Senate, where they don’t need to break a filibuster with 60 votes; instead, they only need a simple majority. The budget process can be used to eliminate (1) penalties for not getting insurance, (2) subsidies for buying government-approved overly-broad insurance packages, and (3) the expansion of Medicaid.”

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post. He was recently named a Barron's Top Financial Advisor and recognized as a Forbes Top Wealth Advisor in Colorado.

More Posts

Follow Me:
LinkedInYouTube