Hackers are using data they’ve discovered to open fraudulent savings accounts in the name of federal employees and get paid for false claims, the government’s HR agency said.

As a benefit to employment, civil servants can sign up for a pre-tax savings account sponsored by the Office of Personnel Management and administered by HealthEquity, Inc. Politico first reported that several hundred accounts, real and fake, have been leveraged to submit false reimbursement claims.

“OPM was notified by the third-party vendor who administers the FSAFEDS program of a rise in fraudulent activity,” a spokesperson for the agency said. “OPM is working with the vendor to secure impacted accounts, compensate impacted individuals and implement additional anti-fraud controls.”

The spokesperson said there is no evidence OPM or its vendors’ internal systems have been breached, meaning individuals likely obtained personal account information through other means. Overall, less than 20% of federal employees use a flexible savings account, as of 2022.

A spokeswoman for Health Equity declined to comment. Both entities are reviewing their security procedures.

It’s not clear how much money has been submitted for false claims, but account holders will be made whole if they haven’t been reimbursed already. Employees should take this opportunity to review their statements to ensure nothing is amiss.

The federal government as a whole has been implementing new requirements to shore up the security of its various applications and portals than can store sensitive information. One such tool is Login.gov, which FSAFeds using to authenticate and verify login attempts on federal websites. Since its inception since 2016, Login.gov has reportedly dismissed safeguards recommend by cybersecurity experts, watchdog reports show.

In any case, the FSAFEDS program comes highly recommended by benefits experts who say employees can use these savings buckets to save the average person up to 30% in federal taxes. Money set aside in an FSA had be used to pay for medical costs that aren’t covered under federal employee health plans.

The individual contribution maximum in 2024 for an FSA is $3,200, up $150 from the year prior.

The next opportunity to enroll in an FSA is open season later this fall.

Molly Weisner is a staff reporter for Federal Times where she covers labor, policy and contracting pertaining to the government workforce. She made previous stops at USA Today and McClatchy as a digital producer, and worked at The New York Times as a copy editor. Molly majored in journalism at the University of North Carolina at Chapel Hill.

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